Guangzhou Automobile Group (2238.HK) :Share purchase shows strong confidence; good buy on dip opportunity

2018-02-13 09:23 港股研报君 阅读 789

机构: 中金公司



What's new 

Guangzhou Automobile Group (GAG) announced that its controlling shareholder, Guangzhou Automobile Industry Group Co. (GAIGC), plans to use propriety funds to purchase GAG’s A-shares from now through to end-2018. GAIGC made the decision based on its views about GAG’s current market performance and growth outlook. 


Planned purchase is up to Rmb300mn; purchase price is not fixed.  

Compared to investors, GAG’s controlling shareholders and management – along with related Guangzhou SOEs – are more confident in GAG’s medium and long term development.  

Strong growth momentum, undemanding valuation and confidence of controlling shareholder. 

See these comments in full on page 3. 

Valuation and recommendation 

We maintain our BUY ratings on GAG-A/-H and reiterate our target prices of Rmb28.90/HK$25.50 (implying 15x/12x 2018e P/E). 


Implementation of the share purchase plan misses expectations; automobile demand plunges. 

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