MMMorganStanleydoesandseekstodobusinesswithcompaniescoveredinMorganStanleyResearch.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofMorganStanleyResearch.InvestorsshouldconsiderMorganStanleyResearchasonlyasinglefactorinmakingtheirinvestmentdecision.Foranalystcertificationandotherimportantdisclosures,refertotheDisclosureSection,locatedattheendofthisreport.+=Analystsemployedbynon-U.S.affiliatesarenotregisteredwithFINRA,maynotbeassociatedpersonsofthememberandmaynotbesubjecttoNASD/NYSErestrictionsoncommunicationswithasubjectcompany,publicappearancesandtradingsecuritiesheldbyaresearchanalystaccount.ChinaAutos&SharedMobilityAutoDealers:TimetoUpgradetoLuxuryCarsItistimetolookbeyonddealers'cyclicalweaknessandprepareforarecoveryfrom2H19,backedbyimprovingnewcarmarginsandrisingcontributionfromafter-salesservices.WeupgradeYongda(ournewtoppick)ontheBMWmodelupcycle.July24,201909:00PMGMTMMMORGANSTANLEYASIALIMITED+ShelleyWang,CFAEquityAnalyst+8523963-0047Shelley.Wang@morganstanley.comContributorsMORGANSTANLEYASIALIMITED+JackYeungEquityAnalyst+8522239-7843Jack.Yeung@morganstanley.comMORGANSTANLEY&CO.INTERNATIONALPLC+HaraldCHendrikseEquityAnalyst+44207425-6240Harald.Hendrikse@morganstanley.comMORGANSTANLEY&CO.LLCArmintasSinkevicius,CFA,CPAEquityAnalyst+1212296-5469Armintas.Sinkevicius@morganstanley.comMORGANSTANLEYASIALIMITED+TimHsiaoEquityAnalyst+8522848-1982Tim.Hsiao@morganstanley.comMORGANSTANLEYASIALIMITED+FrankWanResearchAssociate+8522239-1229Frank.Wan@morganstanley.comMMChinaAutos&SharedMobilityAutoDealers:TimetoUpgradetoLuxuryCarsItistimetolookbeyonddealers'cyclicalweaknessandprepareforarecoveryfrom2H19,backedbyimprovingnewcarmarginsandrisingcontributionfromafter-salesservices.WeupgradeYongda(ournewtoppick)ontheBMWmodelupcycle.brands(50-80%forChina,vs20-40%forUSin2018),higherprofitcontributionfromafter-salesservices(50-60%forChina,vs40-50%forUSin2018),andhigherupsidepotentialfromautofinance(30-40%penetrationinChina,vs70-75%...
