Dongfeng (489.HK): Weighting of SUV continued to lift September 11, 2017 251

Investment Thesis

  • Dongfeng record growth of 4% in Earnings of H1 2017, Distributing the Interim Dividends for the First Time
  • Demand of Commercial Cars Soared, Auto Finance Grew Rapidly.
  • Passenger Cars business were Encumbered by DFPSA.
  • Outlook: Dongfeng Honda is expected to remain Strong, DFPSA seems to Bottom Out.

In accordance with the latest data, we adjust the company’s EPS forecast, and target price to HK$11.65, equivalent to 6.1/5.5x P/E ratio in 2017/2018. The “Accumulate” rating is given. (Closing price as at 7 Sep 2017)

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