HK Stock Market Move | MEIDONG AUTO (01268) falls nearly 4% continuously dragging down dealers with "price war" Citigroup expects the company to incur a loss of 470 million yuan this year.

MEIDONG AUTO (01268) fell by nearly 4%, after rising over 2% in the morning session. As of the time of publication, it fell by 3.76%, to HK$2.05, with a trading volume of HK$6.8547 million. On the news front, according to the China Automobile Dealers Association, in recent times, the association has received a large number of feedback from member companies about the drastic changes in the automotive market brought about by factors such as the ongoing "price war", leading to car dealers being mired in a quagmire and facing acute liquidity problems. According to analysis by association experts, in August, the overall discount rate in the new car market was 17.4%, and from January to August this year, the "price war" has caused an overall retail loss of 138 billion yuan in the new car market. CITIC SEC points out that the gross profit margin of the new car business is under pressure due to soft demand for luxury joint venture models and the continuous impact of the price war, with the company continuing to face price pressures in new car sales, resulting in a new car gross profit margin of -5.1%. Citi predicts that MEIDONG AUTO will incur a loss of 470 million yuan this year, and is expected to turn a profit of 2.33 billion yuan next year. Revenue and net profit forecasts for 2026 are 23 billion yuan and 492 million yuan respectively, mainly due to the decline in average selling prices and gross margins of new car sales, especially affected by weak demand for Porsche and BMW due to the macroeconomic downturn.