[ET Net News Agency, 19 December 2019] Macquarie Research estimated that Dongfeng Motor
Group's (00489) announced sales of 30.7m shares out of its total 110.6m Peugeot S.A. (PSA)
shares could cash in HK$6bn, based on PSA's latest closing price.
The research house sees upside potential with the dividend payout ratio from this.
Upon completion of the disposal, Dongfeng will own a 4.5% equity stake in the merged
entity between PSA and Fiat Chrysler Automobiles (FCA). Positives from improved economies
of scale and synergies should partly help offset the negative impact of DFG's reduction of
its equity stake in PSA.
Following the PSA-FCA merger, Macquarie expects the merged entity to take more effective
measures to improve the operating efficiency at the DF-PSA JV, including increased chances
for asset restructuring, such as the disposal of some idle capacity that could help lower
costs or even generate one-off gains.
Macquarie reiterated its "outperform" rating on DMG, with a target price of HK$8.1. (KL)
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00489 DONGFENG GROUP
Nominal 
2.820 +0.030 (+1.075%) Others
19/12/2019 11:59
{I-bank focus}MacQ sees positives in Dongfeng's PSA sales
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