[ET Net News Agency, 16 November 2020] UOB Kay Hian raised its target price for
Guangzhou Automobile Group (GAC) (02238) to HK$12.5 from HK$8.5 and upgraded its rating to
"buy" from "hold".
It said the upgrade reflects the prospective turnaround at Trumpchi and Guangzhou
Automobile Group New Energy (GACNE) in 2021 as well as a potential spin-off of GACNE
underpinned by launches of new products. GACNE is one of the top five EV manufacturers in
China which sold over 40,300 units of EV in 10-month 2020 versus 31,600 units of NIO. NIO
has a market cap of US$60.7bn versus only US$3.4bn for GAC.
UOBKH raised its 2021-22 net profit forecasts by 10% and 15% to Rmb9,297m and Rmb11,265m
respectively. (KL)