[ET Net News Agency, 3 December 2020] Daiwa Research raised its target price for Minth
Group (00425) to HK$47 from HK$37 and reiterated its "buy" rating.
The research house said Minth has actively expanded its production capacity in Europe
and China in recent years. Its Serbia factory that was built to provide aluminium
components for European customers started to install equipment in 2H and is likely to
start production in 1H 2021. Its Czech factory is another planned addition to serve
increasing demand from European customers for auto structural components and battery
housing, for which Minth would begin to build from 2021.
Daiwa believes capital expenditure will remain high, along with Minth's strong order
winning momentum (CNY7.5-8bn for 2020), especially battery housing for which Minth is the
key supplier for VW's MEB in Europe. Minth guided for capex of CNY2.3bn for 2020, of which
25% is to be invested in battery housing projects.
Daiwa believes an A-share issuance (the board has approved, and the shares issued are
not to exceed 15% of the company's enlarged share issue) would help Minth expand its
business, especially its NEV-related business, whose development would be a positive
structural driver. (KL)