[ET Net News Agency, 30 October 2019] Goldman Sachs lowered its target price for BAIC
Motor (01958) to HK$4.4 from HK$4.76 and maintained its "neutral" rating.
It said BAIC reported in-line 3Q results. Management expressed confidence in
Mercedes-brand short-term and long-term demand, which the research house sees as a
positive read-across for Zhongsheng (00881).
BAIC's EV volume has outperformed the sector again, but the own-brand business still had
RMB1bn in operating losses consolidated into the group. The company guided for a 10%
industry wholesale decline for 2019 (with potentially flat EV) and a further decline in
2020 but expects luxury demand to continue the "relatively fast growth rate".
Goldman lowered its 2019-21 EPS forecasts by -19%/-5%/-3% to reflect widened own-brand
losses on subsidy cuts. (KL)