Citi Research trimmed its target price for BAIC Motor (01958) to HK$15.18 from HK$16, and reiterated its "buy" rating.
The research house noted that BAIC plans to file application for A-share listing in 3Q, and is currently under-going relevant due-diligent process. This is also one of the reasons that BAIC conducted equity financing at this moment, because a company's share capital has to remain unchanged during IPO application process.
Citi believes BAIC has adequate internal resources to support working capital and capex demand in the foreseeable future, that it does not need to seek further equity financing before its A-share listing.
Citi sees high likelihood for BAIC to spin-off its minivan division (Wevan brand) by June 2018 as a way to improve profitability, and investors may start to price in this positive catalyst as time approaches.
It also expects to see accelerating PV wholesale volume growth into 2Q-3Q under Aeffect,
which could enhance sector earnings outlook.
27/04/2018 15:12
[I-bank focus]Citi trims BAIC Motor (01958) to HK$15.18
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