Daiwa Research raised its target price for Guangzhou Automobile Group (GAC)(02238) to HK$9.2 from HK$9 and maintained its "buy" rating.
The research house hosted a conference call with GAC management yesterday for an update on its business operation. GAC targeted 3% volume growth for 2020. Daiwa thinks the target will be mainly driven by GAC Toyota, which targets to sell 700k units this year, while Trumpchi is likely to record flat growth.
GAC guided NEV sales to reach 60k units in 2020 (up 40% from 2019), supported by four models to be launched in November 2020. Daiwa raised its 2020-21 EPS forecasts by 2-3% to reflect the optimism of its JV's business outlook for 2020.
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