Automotive dealers were among the biggest decliners in Hong Kong trading. At the time of writing, YONGDA AUTO (03669) fell 3.75% to HK$1.54, while HARMONY AUTO (03836) dropped 3.06% to HK$0.95. The decline follows a research report from Morgan Stanley indicating that while Chinese mainland auto dealers' commission income has declined, profits remain on a recovery track. The firm lowered profit forecasts for YONGDA AUTO and another auto dealer for 2025–2027, reflecting lower-than-expected new vehicle margins following regulatory adjustments to high-interest, high-commission auto finance products. Morgan Stanley believes that although new vehicle business may further deteriorate in the second half of 2025, posing downside risks to 2025 earnings, it expects Chinese auto dealers' profits to bottom out in 2025 and rebound in 2026.