[ET Net News Agency, 2 November 2020] Jefferies Research lifted its target price for
Guangzhou Automobile Group (GAC) (02238) to HK$8.9 from HK$7.5 and maintained its "buy"
rating.
The research house said GAC's 3Q revenue/earnings were up 19.3%/89.5% with GPM decline.
Strong Japanese brands outperformed in 3Q and support earnings. The risk is a capacity
constraint or high capex.
GAC will collaborate with Toyota on hybrid tech in FY2022, but Jefferies is concerned
about the profitability of the self-owned brand in the near term. It tweaked its FY2020/21
earnings forecasts by 3.5%/1.8%. (KL)