"First Program Holdings Partners with Li Auto to Deepen New Energy Vehicle Services"

On August 23rd, First Programme Holdings (0697.HK) announced that it has signed an agreement with Li Auto to jointly invest in the establishment of Beijing First Programme Supercharge Energy Technology Co., Ltd. (hereinafter referred to as "First Programme Supercharge"), dedicated to building a nationwide supercharging network to promote the popularization and application of new energy vehicles (NEVs).

Currently, the global automotive industry is undergoing a transition from traditional fuel-powered vehicles to electric vehicles. Against this backdrop, whether China's NEV industry can achieve leapfrog development in global competition is of great significance for promoting the transformation and upgrading of our country's economy. In addition, as a mode of transportation powered by clean energy, NEVs can reduce the use of fossil fuels in traditional fuel vehicles and play an important supporting role in the implementation of the "dual carbon" goals. Therefore, promoting the development and popularization of NEVs has far-reaching strategic significance.

I. High demand and favorable policies jointly drive the rapid development of the automotive charging industry

Firstly, let's start with the industry that First Programme Holdings and Li Auto are targeting in their cooperation.

According to data from China's Ministry of Public Security, as of the end of June, the national NEV ownership has rapidly increased from 20.41 million at the end of last year to 24.72 million, with a growth rate of over 20%. Looking ahead, the growth momentum of NEVs remains strong. According to forecasts from China Insights Consultancy, by 2030, the NEV ownership is expected to reach 145 million. With the rapid popularization of NEVs, the demand for charging infrastructure will also surge.

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On the supply side, the construction speed of charging piles is far lower than the speed of car purchases, especially the shortage of public charging piles remains significant. Although the overall ratio of cars to charging piles in our country is gradually improving, there is still a significant gap compared to the Ministry of Industry and Information Technology's goal of "achieving a ratio of 2:1 by 2025 and 1:1 by 2030."

Furthermore, as a supporting infrastructure for the development of NEVs, the construction progress of charging piles has been highly valued at the national level. The "Guiding Opinions on Further Building a High-Quality Charging Infrastructure System" issued by the General Office of the State Council clearly states that charging infrastructure construction should be moderately advanced in line with the development trend of electric vehicles.

From the local level, various measures by governments are also emerging. Taking Beijing as an example, recently, the Beijing Development and Reform Commission and other departments issued the "Implementation Plan for Accelerating the Construction of New Energy Vehicle Supercharging Stations in the City." By the end of next year, Beijing will have built 1,000 supercharging stations, forming a reasonably laid out, convenient, efficient, intelligent, safe, and technologically advanced supercharging network.

Driven by many factors, China's charging pile market has shown a trend of rapid growth in recent years. With the goal of achieving a car-to-pile ratio of 1:1, it is expected that the charging pile industry will develop into a trillion-scale market in the future, showing great growth potential. This also provides opportunities for enterprises that have both infrastructure operation experience and a deep understanding of charging field investment and construction.

II. Strong alliance to achieve a "1+1>2" effectLi Auto, as a leader in China's new energy vehicle market, possesses extensive experience in the site selection and construction of ultra-fast charging stations. As of July 28th, Li Auto's ultra-fast charging stations have reached 700, with the cumulative number of urban ultra-fast charging stations surpassing 200.

In the announcement, First Program Holdings stated that by leveraging the company's rich resources in charging station locations accumulated in the parking field, along with its professional, digital, and standardized asset operation capabilities, combined with Li Auto Group's site selection capabilities and investment construction standards, it will mass-promote the construction and operation of charging infrastructure within cities, further promoting the construction of a clean, low-carbon, safe, and efficient charging service system.

As a core infrastructure service provider in China, the successful partnership between First Program Holdings and Li Auto is a strategic deployment for the company to expand its presence in the new energy vehicle service sector, improve the "parking + charging" business layout, and promote the green and intelligent transformation of parking lots, finding a mature piece to complete the overall layout. This is a truly win-win deal, expected to lead both companies to share the dividends brought by the rapid development of the industry.

More importantly, First Program Holdings has a deep accumulation of asset operation and financing capabilities and has gradually built a full-chain service capability in the broad infrastructure field. The company successfully issued the country's first parking-type REITs product last year, fully linking funds and assets, and maximizing asset value.

The partnership with Li Auto will soon bring another core asset into First Program Holdings' portfolio. Based on First Program Holdings' efficient resource integration capabilities, it has explored ways to revitalize charging infrastructure assets and laid a solid foundation for further enhancing asset liquidity through the issuance of public REITs.

III. Conclusion

Generally speaking, solving the pain points of difficult and slow charging for users by building an ultra-fast charging network to promote the popularity of new energy vehicles requires large-scale enterprises to promote, and strategic cooperation is a positive move for the company to continuously expand its business territory and improve competitive barriers. By integrating high-quality resources to achieve a "1+1>2" effect.

Through cooperation with Li Auto, First Program Holdings is expected to consolidate its leading position in the field of infrastructure asset management and continue to expand its asset management scale, thereby significantly increasing the company's asset management revenue. With the continuous expansion of the ultra-fast charging network, the company's strategic layout in multiple markets will eventually increase financial revenue. For investors, paying more attention to such a rapidly growing potential company is not a wise decision.