In 2018H1, Dongfeng reported a basically unchanged revenue, with better-than-expected EPS of RMB0.9364, representing a yoy increase of 14.9%. Sales expenses and financial costs decreased due to the lower advertising fee and exchange profit respectively. We expect Dongfeng Honda is recovering gradually in H2 and DFNissan’s capacity expansion planning is also about to be put on the agenda. Overall, we expect the Company`s result will maintain steady. In accordance with the latest data, we adjust the company`s EPS forecast, and target price to HK$10.6. The “Buy” rating is given. (Closing price as at 19 Sep 2018)
Interim result rose by 15%
In 2018H1, Dongfeng reported a basically unchanged revenue, reaching around RMB57,922 million with a slight increase of 0.3% over the previous year. The profit attributable to shareholders recorded approximately RMB8,068 million, up about 14.9% yoy; EPS was RMB0.9364, representing a yoy increase of 14.9%. The integrated gross margin was about 13.9%, a slight increase of 0.3 ppts from about 13.6% in 2017H1. With better-than-expected results, the Company continued to distribute a steady interim dividend: 10 cents per share.