[ET Net News Agency, 14 November 2017] CLSA raised its target price for GAC Group
(02238) to HK$20.4 from HK$16.05, and maintained its "underperform" rating.
The research house revised up its FY2017/18 earnings forecast by 7.4/15% to factor in
better product mix of self-owned brand and strong JV growth. CLSA forecasts FY2017
earnings to grow 63.5% YoY, and FY2018 earnings to grow 21% YoY, with ROE of 22.5%.
The stock is trading at 8.7x 2018 PE. CLSA lifted its valuation multiple to 9x 2018
(previously 8.5x 2018 PE) in light of the group's strong pipeline and high earning
visibility. (KL)