[ET Net News Agency, 19 December 2019] Credit Suisse raised its target price for
Dongfeng Motor Group (00489) to HK$10 from HK$9.3 and maintained its "buy" rating.
Dongfeng said it would reduce its share number in PSA group by 27.8% or 30.7mn shares.
This deal is likely to complete in 2020. Assuming the transaction price at PSA's latest
close of EUR22.11 per share, Dongfeng will receive Rmb5.3bn cash (before income tax).
The research house said Dongfeng is likely to book Rmb3.78bn asset disposal gains
(before 25% income tax) or Rmb2.83bn gains post 25% income tax for 2020.
Credit Suisse is positive on this share sale which will result in a 2% book value
increase (due to asset disposal gains). Meanwhile, the above-mentioned Rmb3.97bn post
income tax cash inflow might result in reduced financial expenses if Dongfeng uses the
cash to reduce short-term borrowing. Thus Credit Suisse revised its 2020/2021 estimates by
19%/2%. (KL)
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00489 DONGFENG GROUP
Nominal 
2.820 +0.020 (+0.714%) Research Report
19/12/2019 16:20
{I-bank focus}CS raises Dongfeng Motor (00489) to HK$10
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