Finance联社 reported on October 31st (Reporter: Liu Yang) Anhui Jianghuai Automobile Group Corp.,Ltd., one of Huawei's 'Four Worlds' partners, seems poised to become the next chongqing sokon industry group stock.

On October 31, Anhui Jianghuai Automobile Group Corp.,Ltd.'s stock price soared to 40.95 yuan during the trading day. Within the 19 trading days since hitting the limit up board on September 30 this year, Anhui Jianghuai Automobile Group Corp.,Ltd.'s stock price has accumulated a more than 63% increase, with a total market value approaching 90 billion, reaching a historical high.

"Due to the high asset disposal income in the third quarter, and the smooth progress of the company's external cooperation, we have raised the company's net income forecast for 2024, 2025, and 2026." Soochow Securities' latest research report believes that Anhui Jianghuai Automobile Group Corp.,Ltd. and Huawei have entered into comprehensive strategic cooperation in areas such as product development, manufacturing, sales, and service to create luxury smart connected electric vehicles. The first model is expected to be officially released in the spring of 2025; smooth progress with Volkswagen strategic cooperation; the company's commercial vehicle business operations are stable, and the export business is performing well.

On the night of October 29, Anhui Jianghuai Automobile Group Corp.,Ltd. released its third-quarter report. In the context of a decline in operating revenue in the first three quarters, it achieved a significant increase in net profit, recording operating revenue of 32.206 billion yuan, a 5.06% year-on-year decrease; net profit of 0.625 billion yuan, a 239.86% year-on-year increase. Looking at the quarterly performance, Anhui Jianghuai Automobile Group Corp.,Ltd.'s net profit in the third quarter alone reached 0.324 billion yuan, with an increase of over 10 times year-on-year, setting a new high in single-quarter profits since 2017.

"The sharp increase in net profit in the third quarter is mainly due to the company's continuous efforts to optimize the asset structure and improve resource allocation efficiency, resulting in a significant increase in asset disposal income during the reporting period." Regarding the growth in net profit for the first three quarters of this year, Anhui Jianghuai Automobile Group Corp.,Ltd. stated that, on one hand, the company continues to optimize product and debt structures, actively explore domestic and international markets, increase gains from exchange rate fluctuations, and reduce financial expenses during the reporting period; on the other hand, the company is committed to optimizing asset structures and improving resource allocation efficiency, leading to a significant increase in asset disposal income during the reporting period.

The market's expectations for Anhui Jianghuai Automobile Group Corp.,Ltd. go beyond its current business. According to a research report from Huaxin Securities, deep cooperation with Huawei is expected to drive the company's passenger vehicle brand upward, resulting in a buy recommendation for Anhui Jianghuai Automobile Group Corp.,Ltd.

On October 17, Huawei's Yu Chengdong revealed that the Zunedge is set to debut at the Guangzhou Auto Show in November and plans to officially launch next spring at a price exceeding 1 million yuan, as a high-performance car. Influenced by this news, the next day, Anhui Jianghuai Automobile Group Corp.,Ltd.'s stock price hit the limit up and thus began a streak of consecutive increases.

"The explosive popularity of the previous heavy-duty models has further convinced the capital markets of Huawei's strong capabilities in building a high-end auto brand, which is reflected in the overvaluation of Jianghuai Automobile in the optimistic expectations for Honor. In the view of industry insiders, the capital market is deducing and pricing the hot sales of Honor's future based on optimistic expectations, which will significantly increase Jianghuai's revenue scale and profitability when realized, potentially lowering the seemingly overvalued data."

In terms of cooperation with Volkswagen Group, Jianghuai currently holds a 25% stake in Volkswagen Anhui, which has already launched the first model under the ID. and Volkswagen brands. According to the plan, by 2026, Volkswagen Anhui will introduce four new models including SUVs and sedans one after another.

"Our R&D center in Hefei is fully committed to developing the CMP platform. Leveraging this platform, we will gradually launch four models similar in size to the Tuquan model starting from 2026. These models will be priced at approximately 0.02 million euros, while also bringing us profits." Bertrand, Chairman and CEO of Volkswagen Group (China), recently stated that from 2026, Volkswagen China's global strategy will yield results.

However, it is worth noting that Jianghuai Automobile's net income, excluding non-recurring gains and losses, remains in a loss state. In the first three quarters of 2024, the company's adjusted net income was -0.2312 billion yuan, showing an improvement from -0.5286 billion yuan in the same period last year, but still not achieving profitability. This indicates that the company's core business profitability remains weak, and the significant growth in net income largely depends on non-recurring gains and losses.

Jianghuai Automobile's traditional gasoline car business still dominates the current market. In the third quarter of this year, the sales of new energy passenger vehicles by Jianghuai Automobile were 2720 units, 3031 units, and 3044 units, respectively, with decreases of 9.54%, 14.55%, and 15.93% compared to the previous year.

"Currently, the performance of the traditional gasoline car business still has a significant impact on Jianghuai Automobile's overall performance." The above-mentioned industry insiders believe that Jianghuai Automobile still has room for significant improvement in the transformation to new energy. The upcoming Honor is more like a life-saving straw for Jianghuai in its operational dilemma. Before the official debut of Honor and the release of key data, the market may continue its optimistic trend in the short term. However, for medium to long-term investors, betting on Jianghuai Automobile to become the next Chongqing Sokon industry group stock may not be cost-effective, as there is a need to be cautious of the overly optimistic pricing. "Previously, Jianghuai Automobile has garnered considerable attention from the capital market based on its association with Huawei. However, the future recognition of its products and the potential to dominate the high-end pure electric vehicle market still pose uncertainties. If Honor does not perform well after its listing, the current high valuation will face downward pressure."