Daiwa: raises GAC Group (02238) target price to 10.8 yuan, maintains "outperform" rating

2020/11/2312:56:03 car 1110

Daiwa: raises GAC Group (02238) target price to 10.8 yuan, maintains

Zhitong Finance APP learned that Daiwa issued a research report, maintaining the “Outperform” rating of GAC Group (02238), and raising the target price from 9 yuan to 10.8 yuan.

The bank raised its forecast earnings per share for 2021 from 0.76 yuan to 0.88 yuan, and its forecast price-earnings ratio remained unchanged at 10.5 times. It raised its revenue forecast from 2021 to 2022 by 23 to 27% to reflect its optimism about its new model sales, and also raised its net profit forecast by 11 to 16%, as it believed that the gross profit margin of new energy vehicles would improve, and the production of internal combustion engine vehicles Production costs have been reduced.

Guangzhou Automobile recently announced the "14th Five-Year Plan". The goal is to produce and sell 3.5 million vehicles from 2021 to 2025, 20% of which are new energy vehicles, that is, an average annual sales volume of 700,000 vehicles, of which 140,000 are new energy vehicles. The Group's sales of new energy vehicles in September and October were 7,100 and 7,200 respectively, an increase of 2.55 times and 2.17 times year-on-year, mainly driven by orders for 4 models and institutions.

Daiwa believes that as more new energy vehicles are launched and the price per mileage drops, the average annual level of 140,000 vehicles can be achieved, but the target of an average annual sales of 560,000 internal combustion engine vehicles (ICE) seems to be too aggressive.

In addition, the Group showcased two new cars at the Guangzhou Auto Show, both of which adopted intelligent driving technology, including the pure electric model Aion Y and the internal combustion engine car Trumpchi EMPOW55.

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