Investment Summary

• Over 35% Decrease in Profit in the Third Quarter
• Beijing Benz Keeps a Strong Momentum
• Assured Quantity with Reduced Price, Beijing Hyundai Stepped out of the Bottom
• The Divestment of Self-Owned Brands and the Issuance of A-shares Lead to the Longing of Revaluation

Investment Thesis

The third quarterly results of the Company improved on a sequential basis，but the substantial decline in the whole year was hard to avoid. However, the partial divestiture of the self-owned brands and the issuance of the A shares plan are expected to boost the 2018 performance, so we lower the profit forecast of the Company in 2017, and raise the profit forecast of the Company in 2018 to EPS of RMB0.51/0.93. We will also revise target price to 12.1 HKD (19.6/10.8x for 2017/2018 P/E) and reaffirm accumulate rating.