Morgan Stanley released a research report stating that Lantu, the pure electric vehicle startup subsidiary of Dongfeng Motor Group (00489), has recently submitted detailed IPO application documents. The firm believes this represents an acceleration of the group's spin-off listing process, which provides positive momentum for the stock price. As an independently operating new energy vehicle manufacturer, Lantu's business development is healthy, with overall revenue performance exceeding previous market expectations. The firm maintains an "Overweight" rating on Dongfeng Motor Group.

The firm noted that Lantu's average selling price per vehicle in the first seven months of 2025 increased by approximately 1% compared to 2024, outperforming the firm's previous expectation of a 5% decline for the full year, indicating room for revenue upgrades. The gross margin reached 21.3% in the first seven months of 2025, similar to the 21% for the full year 2024, positioning at industry highs. Sales and administrative expenses during the same period were approximately RMB 3 billion, which is at a reasonable level compared to new energy vehicle manufacturers with similar sales volumes such as LI AUTO-W (02015) and XPENG-W (09868). When considering capitalized operating expenses, Lantu's actual sales and administrative spending was higher than industry peers during the same period.

Lantu's R&D investment is generally lower than industry peers, partly benefiting from fundamental research already completed by parent company Dongfeng Motor Group, reducing duplicate investments. In the first seven months of 2025, it achieved a net profit of RMB 434 million. Despite monthly sales not reaching 10,000 units, it achieved short-term profitability, primarily benefiting from government subsidies of RMB 642 million. After adjustments for capitalized expenses and taxes, the firm estimates a net loss of approximately RMB 2 billion during the same period.

Morgan Stanley indicated that if Dongfeng Motor Group's privatization succeeds, it estimates each share could receive cash plus value of approximately HK$10.65, detailed as follows: Cash portion: According to the proposal, each share would receive HK$6.68 in cash. Lantu stock portion: Valued at approximately HK$3.97 per share, calculated based on 1.25 times Lantu's sales revenue price-to-sales ratio. This multiple is at the lower end among H-share peers, mainly considering the uncertainty of the transaction timeline and limited business and financial transparency before Lantu's formal listing.