[ET Net News Agency, 31 July 2020] Credit Suisse lowered its target price for Nexteer
Automotive (01316) to HK$7.15 from HK$7.4 and maintained its "outperform" rating.
The research house said Nexteer's 1H profit alert was in line with expectations. Looking
into 2H and 2021, Credit Suisse expects a gradual recovery, considering (1) tightened
production plan for automakers in North America to restock the channel; (2) margin
improvement with volume ramping up; and (3) its driveline business in North America
turning to profit after the relocation of its plants to Mexico is completed.
Credit Suisse noted that Nexteer is a beneficiary of the electrification trend in China
and the US, as (1) it has started to supply electric power steering (EPS) products to
GAC's (02238) AION NEV brand and Great Wall Motor's (02333) "lemon" new platform-based new
Haval H6, and will supply to Geely's (00175) PMA-1 electric platform from 2021.
In addition, the company has obtained orders from General Motors and Ford for its
electric pickup trucks. (KL)