[ET Net News Agency, 4 September 2019] UBS Global Research lowered its target price for
Guangzhou Automobile (GAC)(02238) to HK$9.3 from HK$10.3 and maintained its "buy" rating.
The research house said GAC's 1H earnings of Rmb4.9bn accounts for 50% of UBS's
full-year forecast. Considering an unexpected Rmb1bn government subsidy booked in 1Q, UBS
thinks the earnings result is a miss.
UBS said the profitability of Trumpchi and Jeep are more vulnerable than it previously
thought. But UBS remains optimistic on its EV product Aion S, though, due to its strong
competitiveness on technology and price.
It lowered its 2019 earnings forecast by 10% due to extended losses at GAC FCA JV, as
well as lowered earnings expected at the Trumpchi unit. (KL)