"neutral" to "overweight", with valuations benchmarked at 11- 13.5x, based on mid cycle
valuations with the exception of Brilliance and Geely.
The house expects the auto sector to post robust earnings growth on the back of improved
demand and supply fundamentals, which support strong sales and sustained margins.
It looks to the luxury and SUV segments to provide the next wave of growth. Brilliance
remains its top pick for the sector with demand for the new 5 series far exceeding
expectations. Dongfeng comes in a close second with a comprehensive product portfolio
cementing its position as a market leader.
CIMB's latest ratings and target prices on the auto players are as follows:
Name Rating Target Price
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Dongfeng Motor (00489) Outperform HK$23.30
Qingling (01122) Outperform HK$3.44
Brilliance China (01114) Outperform HK$8.75
Weichai Power (02338) Neutral HK$52.50
Minth (00425) Outperform HK$16.80
Geely (00175) Outperform HK$5.75
(KL)