Goldman Sachs raised its target price for BAIC Motor (01858) to HK$4.6 from HK$4.4 on valuation roll-over and maintained its "neutral" rating.
The research house lowered its 2020/21 revenues forecasts by -6%/-2% and net profits by -29%/-9%. It said that BAIC has no capacity exposure to Hubei province, hence it is relatively intact on the production side.
Goldman tuned its 2020 and 2021 passenger vehicle volume forecasts to reflect coronavirus impact between late January and early March. After the industry's -21% retail contraction in January, it forecast -75% in February, -50% in March, leading to 1Q overall volume -43%. However, Goldman expects retail to turn positive starting in April and achieve >10% growth in 2H.
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