中国科技：森林报告2025年三季报版：电子与汽车以旧换新补贴和税收优惠开始同比回落，增长面临阻力初现（英）8

The Forest Report - 3Q25 Edition Industry Update Early signs for headwinds ahead as electronics and autotrade-in subsidies and tax incentives have started to lap; AIcapex in Q3 down qoq and below expectations due to chip China TechnologyPOSITIVE China Technology Jiong Shao, CFA+1 212 526 5562jiong.shao@barclays.com Trade-in subsidy and take rate increases lapped; ecommerce players need new growth engines:BABA (OW) sustained solid growth momentum with CMR up 10% yoy in Sep-Q, but weexpect 4Q to decelerate as take rate tailwinds fade. We remind investors that BABA introducedor re-introduced 0.6% of GMV platform fees in early Sep 2024. Stabilizing/gaining market shareremains its focus, and quick commerce will generate synergies with its core ecommerce. Thelapping effect of trade-in benefits is more pronounced at JD (OW), seeing only 5% yoy growth inelec. & appliances, down from teens to over 20% yoy growth in the previous three quarters, andwe expect flattish yoy in 4Q. On the other hand, JD’s general merchandise and marketplacecontinued to accelerate, supporting retail topline and margin expansion; however, profitabilitywas offset by investments in new initiatives (mainly food delivery). Similarly, Xiaomi (OW) IoT Lian Xiu (Roger) Duan+1 212 526 4633lianxiu.duan@barclays.com Xinyao Song+1 212 526 6972xinyao.song@barclays.com Food delivery loss likely peaked in 3Q, yet competition remains elevated and Meituan'sprofitability may never go back to its past peaks in our view:In Sep-Q,we estimate BABA'squick commerce loss at -RMB 36.5bn, Meituan's (UW) core local commerce (CLC) investment at-RMB 28.6bn (3Q loss vs profit a year ago), and JD's loss slightly below 2Q’s -RMB10-13bn. Oncompetitive dynamics, BABA maintained order market share while GMV share edged up drivenby higher AOV, while halving UE loss in Oct vs Jul and Aug. Meituan led GMV market share inmid-to-high AOV orders (>RMB 15), and saw order share rebound a bit in Nov. JD's order volumeremained relatively stable. All major players expect food delivery losses to narrow in 4Q drivenby UE improvement and lower subsidies - industry subsidies trended down in Oct & Nov vssummer peak, and cooled further post Double 11 Shopping festival. We think intense Growth for ads platform continued into 3Q25 driven by improved user engagement and AI-driven eCPM growth.Kuaishou (EW) delivered 14% growth with both closed-loop and externalads growing at teens % rate. Tencent (OW) delivered 21% yoy growth with eCPM and userengagement each contributing half of this growth. The former was mainly driven by AI-driven adtech improvements and the latter due to both higher DAU and time spent. BILI (OW) grew adsrevenue by 23% as it raised ad load by 1ppt coupled with improved eCPM. BIDU (EW) saw someearly signs of success from its AI ads business which grew +262% yoy to RMB 2.8bn. While early Insufficient chip supplies and other bottlenecks through the AI value chain restraining AIcapacity from meeting strong demand; No AI bubble expected in the next 2-3 years perBABA:BABA Cloud accelerated revenue growth to 34% yoy (+6ppt vs our estimate), its 8thconsecutive quarter of revenue growth acceleration, and management expects this momentumto continue in the coming quarters. BABA management stated that AI bubble is unlikely withinthe next two to three years based on what it is seeing in its pipeline as enterprises areaccelerating AI adoption, while AI capacities may need to ramp up for at least two to three yearsto satisfy surging demand. Similarly, Tencent’s GPUs are mostly only sufficient for internal useto boost ad and gaming businesses, but external cloud remains constrained by chip availability. Phase-out of NEV trade-in and replacement subsidies in key regions is likely to weigh on4Q numbers while NEV players work to ramp up new model deliveries.NIO (UW) revised its4Q25 delivery guidance to 120k–125k units, down from the previous 150k guide (~50k permonth) as the phase-out of subsidies had a meaningfully negative impact on the ONVO L90sales. NIO’s new ES8 will contribute a meaningful portion of the 4Q deliveries and will be key toreaching its 4Q break-even target. For LI (EW), the ramp up of i6 is much slower than expecteddue to supply chain constraints. Management expects i6 to gradually ramp up to 20k deliveriesearly next year after onboarding a new battery supplier, although margins are likely to remainunder pressure during this period. XPEV (UW)'s X9 EREV launched on 11/20, with deliveriesstarting immediately, aiming for several thousand monthly units by December. Core models Ecommerce BABA:CMR maintained solid growth momentum at 10% yoy, but BABA expected CMR growth in4Q to decelerate as take rate drivers (0.6% software service fee and ad tool QZT) lap. It remainsfocused on stabilizing/gaining market share in the mid-to-long term. Quick commerce synergieswere mainly on groceries, healthcare, and supermarket products, while BABA is enhancing JD:General merchandis