China Auto Manufacturers: CBG Fund Flow Update (Car-BYD, Battery-CATL, Glass-Fuyao)—Fuyao's Attractive Risk-Reward & 3Q Preview

We maintain our positive view on Fuyao as: (1) ASP momentum: we expect 3Q ASP to improve 1-2% QoQ / 5% YoY; (2) we expect strong 3Q results: Revenue Rmb13.1bn, GPM 38.1%, NP Rmb2.55bn, with solid FCF; (3) attractive valuation: H/A shares near 10-year P/E troughs of 10x/12x, below CATL-H (17x) and in-line with CATL-A (12x); (4) dominant market position with >70% share in China's automotive glass market, well above CATL's ~40% NEV battery share; (5) ASP accelerating at +7% YoY in 1Q/2Q26 while valuation sits at historical lows. CBG fund flow update: We view Fuyao as a proxy to benchmark the valuation floor for large-scale auto parts makers. Its H and A shares are trading near their 10-year P/E valuation troughs of 10x and 12x, respectively. CATL H shares continue to trade at a P/E premium (currently 47%) over the non-weighted average of BYD & Fuyao H shares, down from 130% at late-June. A-share investors appear more cautious, with CATL's A-share differential reaching a 15% discount, conv