[ET Net News Agency, 19 December 2019] Group PSA disclosed a plan to buy back 30.7m
shares currently held by Dongfeng Motor Group (00489) in its 50/50 merger announcement
with FCA. As a result, Dongfeng will have a 4.5% stake in the combined entity (currently
Dongfeng holds a 12% stake in Group PSA).
Daiwa Research views the announcement as positive given significant disposal gains
(CNY2.9bn) and potential dividend yield boost for 2020 (assuming the disposal is in 2020).
However, the research house does not expect a major change in its China JV (DF PSA)
operation and it thinks management's key focus remains to narrow the loss-making for DF
PSA.
Daiwa maintained its "outperform" rating on Dongfeng. (KL)