[ET Net News Agency, 29 March 2021] Daiwa Research cut its target price for Guangzhou
Automobile Group (GAC) (02238) to HK$9 from HK$10.8 but upgraded its rating to "buy" from
"outperform" after the year-to-date share price correction.
The research house lowered its 2021 EPS forecast by 8% due to likely sustained chip
shortages over the year. Daiwa expects the improvement to be sustained in 2021-22 with
solid sales volume growth of 13-15%, particularly backed by new models such as the BEV
Aion Y, EMPOW55, and new GS4 to be launched in 2021.
Daiwa expects 2021-22 gross margins to improve to 7.2-8.3% from 3.6% in 2020. (KL)