[ET Net News Agency, 24 May 2018] Morgan Stanley trimmed its target price for Guangzhou
Automobile Group (GAC)(02238) to HK$15 from HK$20, and retained its "equal-weight" rating.
The research house said GAC is manufacturing its own new energy vehicle (NEV) pipeline.
GAC launched two PHEV versions of its popular SUV models and a BEV, the GE3, in 2017.
GAC's current EV exposure is less than that of its primary competitors (SAIC and BAIC).
Thanks to its strong pipeline for NEVs, GAC should preserve its presence in the market.
A concern for GAC is its Japanese JVs - GAC Honda, GAC Toyota and GAC Mitsubishi - because
they have not as yet launched any NEV models, and as such, they are unlikely to have
enough credit points for NEVs, Morgan noted.
Morgan maintained its 2018-19 earnings forecasts, but it expects earnings beyond 2020 to
decline as a result of risks around its NEV outlook. (KL)