Jefferies Research lowered its target price for Dongfeng Motor Group (DFG)(00489) to HK$6 from HK$9.8 and downgraded its rating to "hold" from "buy".
The research house said the travel restrictions imposed to control the spread of coronavirus point to potential disruption to DFG, which is headquartered in Wuhan city.
Production/wholesale of the four plants will be affected, Honda JV to take the biggest hit. The retail volume will be disrupted mildly but production underutilization could weigh on 1H 2020 earnings.
Jefferies revised down its FY2020 volume and earnings forecasts by 3% and 5% to growth of 0.2% and 0.6% versus FY2019.
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