[ET Net News Agency, 28 August 2018] HSBC Global Research lowered its target price for
China Zhengtong Auto Services (01728) to HK$7.5 from HK$9.6, and maintained its "buy"
rating.
The research house said Zhengtong's 1H net income of RMB711m was in line with HSBC's
estimates. Zhengtong recorded a new car sales margin of 6.3%, further increasing from the
level for 2H 2017 of 5.4%.
Driven by the overall tightening in 1H and organizational structure, management guided
down its full-year guidance for the auto finance business by 25%. HSBC thinks that in 2H
as macro monetary policy turns to loose, both the amount of new loans and interest spread
will be better than 1H.
HSBC revised down its earnings estimates for Zhengtong by 14%, 17% and 20% for 2018-20.
(KL)
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01728 ZHENGTONGAUTO
Nominal 
0.246 -0.002 (-0.806%) Others
28/08/2018 17:36
[I-bank focus]HSBC cuts Zhengtong Auto (01728) to HK$7.5
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