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Investors should not base investment decisions on this website alone. Please refer to the Prospectus for details including product features and the risk factors. Investment involves risks. Past performance is not indicative of future performance. There is no guarantee of the repayment of the principal. Investors should note:

Global X Innovative Bluechip Top 10 ETF (the “Fund’s”) seeks to provide investment results that, before deduction of fees and expenses, closely correspond to the performance of the Mirae Asset Global Innovative Bluechip Top 10 Index (the “Index”).
The Index is a new index. The Index has minimal operating history by which investors can evaluate its previous performance. There can be no assurance as to the performance of the Index. The Fund may be riskier than other exchange traded funds tracking more established indices with longer operating history. The Index is an equal weighted index whereby the Index constituents will have the same weighting at each rebalancing (but not between each rebalancing) regardless of its size or market capitalisation based on the methodology of the Index.
The Fund’s investments are concentrated in companies with a technology theme. Many of the companies with a high business exposure to a technology theme have a relatively short operating history. Technology companies are often characterised by relatively higher volatility in price performance when compared to other economic sectors. Companies in the technology sector also face intense competition, and there may also be substantial government intervention, which may have an adverse effect on profit margins. Rapid changes could render obsolete the products and services offered by these companies. These companies are also subject to the risks of loss or impairment of intellectual property rights or licences, cyber security risks resulting in undesirable legal, financial, operational and reputational consequences.
The Fund’s investments are concentrated in companies in the technology sector. The Fund’s value may be more volatile than that of a fund with a more diverse portfolio. The value of the Fund may be more susceptible to adverse economic, political, policy, foreign exchange, liquidity, tax, legal or regulatory event affecting the technology sector.
The number of constituents of the Index is fixed at 10. The Fund by tracking the Index may have a more concentrated investment portfolio than it would have held if tracking an index with a higher number of constituents, leading to higher risks of volatility.
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Global EV and Battery – The Chinese Giants Will Emerge Stronger

By: Jeff Huang

In the wave of global EV transition, China emerges as a global leader thanks to the ramp-up of charging infrastructure, rapid launches of competitive models, and rising awareness of consumers. China EV (including BEV and PHEV) penetration reaches 45%+ in past months, substantially higher than EU (c.20%) and US (c.10%), and China accounts for over half of EV sales globally. Across global EV value chain, Chinese enterprises are gaining traction, commanding the largest global share in EV (BYD) and battery (CATL) market. In a rapidly evolving industry, we see the solid cash position and strong R&D capability as the key for BYD and CATL to fend off competition and sustain leading positions.

Albeit with strong product and cost competitiveness as well as solid growth outlook, BYD and CATL currently trade at undemanding valuations, offering a compelling opportunity for investors seeking to capitalize on the global EV development. BYD and CATL are key holdings for Global X Innovative Bluechip Top 10 ETF (3422 HK) with combined weighting of c.20%.

BYD – More Than a Cost Leader

On the back of the surging NEV demand in China, BYD sold over 3mn units of NEVs (including 1.4mn units of PHEVs and 1.6mn units of BEVs) in 2023, and is on track to reach its 4mn units sales target in 2024, making it the largest NEV company (by volume) globally. Starting as a mass-market automaker, BYD’s superior cost basis and strong vertical integration helps the company capture the window of opportunities at the initial stage of EV transition, while its leading proprietary technology, improving brand recognition, and ongoing premiumization trajectory should support BYD to further capture global EV market share in a more profitable manner going forward.

Amid fierce competition, we see better sustainability for BYD with its healthy cash positions and strong R&D capabilities as compared to other loss-making peers, positioning the company as one of the best options to help investors capture the structural trend of vehicle electrification globally.

Technology leadership is the core to BYD’s dominance. Company expect R&D expenses in 2024 to continue ramp up vs 2023 (Rmb40bn) and R&D/Revenue will remain stable, as supported by the solid cash position (Rmb 68bn Net Cash in 2023) and strong FCF generated (Rmb 47bn FCF in 2023). BYD’s dedicated investments in R&D foster its leading technology (Proprietary cell-to-pack Blade batteries and DM-i technology) and rich product pipeline. Further roll out of DM-i 5.0 to more models and improving product mix should improve profitability outlook even in a highly competitive market.

Though still facing tariff uncertainty, overseas expansion should remain a key driver for BYD thanks to its established core battery technologies, model platform, and improving brand recognition. BYD’s strategy to invest in local production facilities should mitigate tariff uncertainty, and BYD will have 3 wholly-owned overseas factories with total annual capacity of 450k units by end-2025. BYD has entered into over 70 countries and regions, and we see potential for BYD to further penetrate into emerging markets such as Southeast Asia and South America as its price-competitive and quality products should cater to local consumer preference. Brazil, Thailand and Israel remain the top 3 export destinations for BYD YTD.

With persistent range anxiety among consumers and a shortage of rapid-charging stations, PHEV models are seeing booming demand and have become the key driver for NEV growth. BYD’s latest DM-i 5.0 technology brings greater fuel efficiency, longer range, and higher engine thermal efficiency, further enhancing the competitiveness of its PHEV models. Amid fierce competition, many mass-market JVs have been loss making in China since 2024, which could accelerate a strategic retreat by global carmakers from China market. This leaves BYD an opportunity to further gain market share driven by its product and price competitiveness, as well as rising brand equity.

CATL – Global Leader with Superior Battery Products

Overcapacity drove a deteriorating landscape in battery industry over the past 2 years, but we could be seeing an inflection point as supply-demand dynamics continue to improve. On supply side, Capex for Chinese battery makers decreased by over 50% from the peak, and planned annual Capex of key players for 2024/25E have also been revised down substantially. Continued Capex deceleration should drive a subsequent decrease in capacity. On demand side, China battery domestic shipment grew by c.40% YoY in 1H24, according to CABIA, as supported by resilient EV demand and growing ESS demand. Improving supply-demand dynamics should drive a gradual recovery in capacity utilization rate and support improving margin for key players.

CATL is the largest battery maker globally, commanding c.40% global battery market share. CATL’s dominant position is bolstered by its superior battery products, featuring higher energy density and better quality, and the company enjoys a well-diversified client base covering leading EV OEMs globally. CATL’s battery yields higher energy density in both NCM space (Qilin Battery) and LFP space (Shenxing Plus Battery), thus enjoying price premiums compared to peer products. In addition, CATL battery offers better reliability, as evidenced by its lower warranty compensation ratio among peers. CATL’s solid cash positions and commitment in R&D should help sustain its competitive advantages in the long run.

CATL’s superior energy density brings both cost savings and price premiums for its battery, leading to better profitability compared to peers. CATL remains its dominant position in mid-high end market, and ongoing product premiumization trajectory through higher adoption in Energy Storage, Commercial Vehicles, Premium PV and Overseas should also contribute to profitability expansion. CATL expects its GP/unit to stay stable at around ~Rmb200/kWh, a substantial premium compared to peers.

Volume outlook remains solid at 20%+ YoY in 2024E as driven by solid ESS growth and resilient domestic EV demand. Overseas landscape is improving, with CATL’s Hungarian plant is on track for production in 2025, and its LRS cooperation in the US is also progressing steadily. CATL remains confident in the Europe market, stating that it will be the major supplier to European core OEMs’ new EV pipelines. ESS growth is expected to further accelerate in 2025E as US will step up tariffs on ESS batteries in 2026.

Related Global X ETFs’ Product¹

	Global X Innovative Bluechip Top 10 ETF (3422 HK)
Inception Date	24 Nov 2023
Reference Index	Mirae Asset Global Innovative Bluechip Top 10 Index²
Primary Exchange	Hong Kong Stock Exchange
Ongoing Charges Over A Year	0.68% p.a.
Product Page	Link

The Fund adopts a single management fee structure, whereby a single flat fee will be paid out of the assets of the Fund to cover all of the costs, fees and expenses of the Fund. As the Fund is newly set up, this figure is an estimate only and represents the sum of the estimated ongoing charges over a 12-month period, expressed as a percentage of the estimated average Net Asset Value of the Listed Class of Units of the Fund over the same period. It may be different upon actual operation of the Fund and may vary from year to year. As the Fund adopts a single management fee structure, the estimated ongoing charges of the Fund will be equal to the amount of the single management fee, which is capped at 0.68% of the average Net Asset Value of the Listed Class of Units of the Fund. Any ongoing expenses exceeding 0.68% of the average Net Asset Value of the Listed Class of Units of the Fund will be borne by the Manager and will not be charged to the Fund. Please refer to the Key Facts Statement and the Prospectus for further details.

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This document contains the opinions of Mirae Asset Global Investments (Hong Kong) Limited (“MAGIHK”) and is intended for your use only.

It is not a solicitation, offer or recommendation to buy or sell any security or other financial instrument and shall not constitute any form of regulated financial advice, legal, tax or other regulated service. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. MAGIHK makes no representation as to their accuracy or completeness and therefore do not accept any liability for a loss arising from the use of this document.

Investment involves risk. Forecasts, past information and estimates have certain inherent limitations. Statements concerning financial market trends or portfolio strategies are based on current market conditions, which will fluctuate. There is no guarantee that these opinions are suitable for all investors and each investor should evaluate their ability to invest for the long term, especially during periods of downturn in the market. Outlook and strategies are subject to change without notice.

Past performance information presented is not indicative of future performance. Before making any investment decision, investors should read the fund’s offering document for further details including the risk factors. Investors should ensure they fully understand the risks associated with the applicable investment and should also consider their own investment objective and risk tolerance level. Investors are advised to seek independent professional advice if in doubt.

Certain information contained herein (the “Information”) is sourced from/copyright of MSCI Inc., MSCI ESG Research LLC, or their affiliates (“MSCI”), or information providers (together the “MSCI Parties”) and may have been used to calculate scores, signals, or other indicators. The Information is for internal use only and may not be reproduced or disseminated in whole or part without prior written permission. The Information may not be used for, nor does it constitute, an offer to buy or sell, or a promotion or recommendation of, any security, financial instrument or product, trading strategy, or index, nor should it be taken as an indication or guarantee of any future performance. Some funds may be based on or linked to MSCI indexes, and MSCI may be compensated based on the fund’s assets under management or other measures. MSCI has established an information barrier between index research and certain Information. None of the Information in and of itself can be used to determine which securities to buy or sell or when to buy or sell them. The Information is provided “as is” and the user assumes the entire risk of any use it may make or permit to be made of the Information. No MSCI Party warrants or guarantees the originality, accuracy and/or completeness of the Information and each expressly disclaims all express or implied warranties. No MSCI Party shall have any liability for any errors or omissions in connection with any Information herein, or any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

Issuer: Mirae Asset Global Investments (Hong Kong) Limited (Licensed by the Securities and Futures Commission for Types 1, 4 and 9 regulated activities under the Securities and Futures Ordinance). This document has not been reviewed by the Securities and Futures Commission or the applicable regulator in the jurisdiction which this article is posted and no part of this publication may be reproduced in any form, or referred to in any other publication, without express written permission of MAGIHK.

Authors: Yimin Huang(Licensed by the Securities and Futures Commission for Types 1 and 4 regulated activities under the Securities and Futures Ordinance). The authors and their associate(s) do not hold the securities/funds mentioned in the article.