Report Review of September 2017 September 29, 2017 697

Automobile & Air (ZhangJing)

This month I released 4 equity reports including Fuyao (3606 HK), Dongfeng (489 HK), BAIC (1958 HK) and GAC (2238 HK). Among which, we prefer the GAC first. GAC`s 17H1 net profit attributable to shareholders amounted to RMB6.27 billion, with a yoy increase of 57%; the EPS was RMB0.97. The Company sold 964,000 vehicles in H1, up 31.7% yoy. Among other things, the five major increment contributors were GAC`s self-owned brand (+91586), GAC Honda (+47297), GAC Fait (+47229), GAC Mitsubishi (+34969), GAC Toyota (+10704), by increment contribution, respectively, among which, GAC Mitsubishi rose by 182% yoy, GAC Fait 77% yoy, GAC`s self-developed brands 57% yoy, GAC Honda 17% yoy, and 5% yoy GAC Toyota. We believe that the excellent sales result has set the tone of high-growth result for GAC in this year and we expect that under the protection of a variety of strong models, the Company`s profitability still has a large upwards elastic space.

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