[ET Net News Agency, 17 June 2019] Jefferies Research said China's car retail sales
volume (insurance number) declined 3% in May, recovering from -9/-6% in March/April.
The research house expects to see positive retail growth in June given the low base and
ongoing de-stocking of China V cars. Inventory has reduced to 1.65 months by the end of
May, close to normal level (1.5 months). Wholesale will pick up soon as the industry needs
to roll out China VI cars in late June and July.
Jefferies revised down its earnings forecasts due to delayed stimulus. It also revised
its target prices for the players in the industry as follows:
Name Rating Target price
-----------------------------------------------------------
BAIC Motor (01958) BUY HK$5.9 from HK$5.1
Brilliance China (01114) BUY HK$11
BYD Company (01211) UNDERPERFORM HK$36.9 from HK$40.8
Dongfeng Motor (00489) BUY HK$8.8 from HK$10.5
Geely Automobile (00175) BUY HK$18.8 from HK$21.3
Great Wall Motor (02333) HOLD HK$6 from HK$7.1
Guangzhou Auto (02238) BUY HK$9.7 from HK$12
Minth (00425) BUY HK$22.7 from HK$38.5
(KL)