BAIC (1958.HK): Korea brand car is recovering June 19, 2018

Investment Thesis

Given all mentioned conservative opinion on BAIC`s self-owned brand, neutral view of Beijing Hyundai and optimistic expectation of Beijing Benz, we lower the profit forecast of the company in 2018/2019 to EPS of RMB 0.83 / 1.23. We will also revise target price to 9.3 HKD (9/6.1x for 2018/2019 P/E) and reaffirm accumulate rating. (Closing price as at 14 June 2018)

60% decline in 2017 while soar of 17.5% in Q1 2018

According to the result report of BAIC in Q1 2018, the company`s revenue increased to RMB39.8 billion, up 9.3% yoy and its net profit attributable increased to RMB1,595 million, up 17.5% yoy, reporting a significant mom improvement from RMB284 million in Q4 2017. EPS was RMB0.21.

About the author

Profile photo of Zhang Jing

Zhang Jing
Phillip Securities (HK)

Bachelor Degree in Tongji University of Engineering; Master Degree in East China Normal University of finance. Currently covering the automobile and air sectors. She has years of experience in investment research and is good at combining analysis for the companies with industry prospects.

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