Morgan Stanley cut its target price for Dongfeng Motor Group (00489) to HK$10.5 from HK$12 and maintained its "overweight" rating.
The research house said Dongfeng's sales for January-February 2019 fell 17.3%, in line with the market's 16.7% drop, per CPCA data. Dongfeng Nissan and Dongfeng Honda continued to outperform the market with 3% and -7.2% sales growth, respectively, while Dongfeng
PSA remained a major drag with 60% decline.
Morgan cut its 2018-20 earnings forecasts by 11%, 10%, and 10%, after factoring in stronger than expected JV contribution from Dongfeng Nissan and Dongfeng Honda, as well as worse than expected sales and margins for Dongfeng PSA and Dongfeng Fengshen.