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