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02238 GAC GROUP
RTNominal down7.750 -0.190 (-2.393%)
Research Report

02/07/2019 14:00

[I-bank focus]Morgan upgrades GAC Group (02238) to HK$12

[ET Net News Agency, 2 July 2019] Morgan Stanley lifted its target price for Guangzhou
Automobile Group (GAC)(02238) to HK$12 from HK$9 and upgraded its rating to "overweight"
from "equal-weight".
The research house cited its channel checks indicating that Trumpchi already began to
see a narrowing sales decline in May, with wholesale sales down 27%, versus around 40%
in January to April. For 1-23 June, wholesale sales for GAC Trumpchi were down only 4%.
Meanwhile, GAC Toyota and GAC Honda continued to post strong sales performances in
recent weeks, with GAC Honda recording 33.5% and 25.1% sales growth in March and April,
and a 6.5% sales drop for 1-23 June. For GAC Toyota, it recorded 0.4% and 1% sales growth
for March and April, and its 18.8% sales growth for 1-23 June was the
strongest among all major brands.
Morgan raised its net profit assumption by 2% to factor in higher sales volume, partly
offset by lower ASPs with the destocking of China V models. For 2020 and 2021, it raised
its net profit assumptions by 8% and 12%, as it turned more positive on sustained strong
growth for Japanese brands. (KL)

Remark: Real time quote last updated: 23/09/2019 17:59
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