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Friday
08Jan2010

Dragon Hill Wuling (305 HK): Get the show on the road- Not Rated

DateFriday, January 8, 2010 at 9:45AM

 

to summarize…

- Sustainable automobile market in 2010 after extension of favourable policies.

- 31.0% top-line growth in 1H backed by SGMW’s 49.2% increase in car sales and DHWL’s own 87.8% jump in specialized vehicle segment.

- Capacity shortage dragged down gross margin by 0.8pcp to 6.2% in 1H but improvement is expected following Qingdao plant’s scaling up.

- Impressing progress achieved in specialized vehicle division by exporting 100 electric cars to America and getting one model chosen by the government.

- Extra funding is needed to meet capital contribution commitment to the JV and, thereafter, will be used for capacity expansion.

- Earnings to hit RMB118.1m in FY12/10F and RMB183.8m in FY12/11F.

- Fair value estimated at HK$1,341.2m, containing 25.0% valuation discount to peers.

DH Wuling: get the show on the road

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