BAIC Group launched the "Three-Year Leap" action in 2025. As the group's No. 1 project to venture into the new energy market, the company is expected to be the first to be empowered. The company has built a Stelato + ArcFox dual-brand strategy. Both brands have achieved rapid volume ramp-up through product matrix expansion. With the launch of Stelato MPV and SUV in 2026, sales are expected to increase significantly. The ArcFox's monthly sales exceeded 20,000 units, and it launched the highend brand Wendao. In addition, the Robotaxi model launched by the company in partnership with Pony.ai has started pilot operations, further strengthening the company's technological attributes. We are optimistic that BAIC BluePark will enter an upward cycle driven by the dual brands of Stelato and ArcFox.

I. Senior Management Change: "Three-Year Leap" Initiative Brings New Development Opportunities

On March 27, 2024, Zhang Jianyong officially assumed the role of CPC Committee Secretary and Chairman of BAIC Group, having previously served as Deputy Manager of the Finance Department and Deputy General Manager of BAIC Group, before becoming a Member of the CPC Committee and Deputy Director of the Beijing SASAC. In March 2026, Liu Guanqiao took over as Chairman of BAIC BluePark, bringing over twenty years of extensive experience in automotive sales and corporate management through his previous roles at Beijing Hyundai, Beijing Automotive, and BAIC BluePark.

BAIC Group has launched its "Three-Year Leap" initiative, under which BAIC BluePark is positioned as the flagship project for BAIC's push into the new energy vehicle market and is expected to be the first beneficiary of the group's empowerment.

Risks:

1) Risk of raw material price fluctuations. The cost of lithium carbonate accounts for a high proportion of the battery cost of the company's new energy passenger vehicles. If the price of lithium carbonate sees narrower drops or rises again in the future, the decline in the company's material costs will fall short of expectations. If raw material prices rise sharply, the gross profit margin of the passenger vehicle business will decrease.

2) Risk of intensified industry competition. Currently, the launch of new energy passenger vehicle products by various OEMs is significantly accelerating, and competitors are lowering product prices. If market competition intensifies significantly, the company's sales growth will be affected, and the company's operating re venue will fall short of expectations.

3) Risk of demand falling short of expectations. The company's main business growth comes from new energy passenger vehicles. If the growth of the penetration rate of new energy vehicles falls short of expectations, or the overall demand for passenger vehicles declines, the company's revenue will fall short of expectations.