[ET Net News Agency, 2 November 2020] Daiwa Research lowered its target price for
Guangzhou Automobile Group (GAC) (02238) to HK$9 from HK$9.2 and downgraded its rating to
"outperform" from "buy".
The research house said GAC's revenue grew by 19% in 3Q, mainly contributed by GAC
Motor's 10% growth in sales volume and implied a 9% growth in ASP. GAC plans to launch
models that have better technological features and improved stylish design. It will launch
the upgraded GS4 and next-generation GS8 in 2021.
Daiwa cut its 2020-21 net profit estimates by 13-14%. It saw stronger-than-expected ASP
recovery in 3Q, though this was partly due to the narrower price discount this year,
which is not sustainable. (KL)