[ET Net News Agency, 6 April 2020] BofA Global Research lifted its target price for
Great Wall Motor (GWM)(02333) to HK$6.4 from HK$5.1 and upgraded its rating to "buy" from
"underperform".
The research house said GWM's share price has declined 30% from the peak, and BofA
believes this has factored in the negative impact from the weak auto demand in China due
to COVID-19 outbreak.
BofA said the upgrade reflects (1) GWM brand position should benefit the most from
potential government supportive policies in auto sector, (2) gain share from new model
pipeline in 2020; and (3) net profit per car improvement, aided by rising contribution
from auto finance, and component cost decline.
To factor in its latest volume sales forecasts and margin assumptions, BofA raised its
earnings forecast by 3%/23% for 2020/21. (KL)