Asia gaming and consumer discretionary analyst

Michael Ting

Equity Bottom-Up

Guangzhou Automobile Group / Equity Bottom-Up

<p>Without strength in GAC's  <a href="https://www.smartkarma.com/entities/guangzhou-automobile-group-co-ltd" target="_blank" data-smartkarma-citation="entities:11082:1" rel="noopener">Guangzhou Automobile Group (2238 HK)</a> own core product - its Trumpchi branded SUVs, the stock may not be able to re-rate despite being a share price laggard YTD. We estimate that Trumpchi accounted for c.37% of GAC's core pre-tax profit when the share price peaked in 4Q17 (vs. operating loss in 1H20). Without this profit contribution from Trumpchi and with the stock already trading at an expensive 11.5x forward P/E, we do not believe the stock has a favorable risk/reward.</p>

Without strength in GAC's  Guangzhou Automobile Group (2238 HK) own core product - its Trumpchi branded SUVs, the stock may not be able to re-rate despite being a share price laggard YTD. We estimate that Trumpchi accounted for c.37% of GAC's core pre-tax profit when the share price peaked in 4Q17 (vs. operating loss in 1H20). Without this profit contribution from Trumpchi and with the stock already trading at an expensive 11.5x forward P/E, we do not believe the stock has a favorable risk/reward.

広州汽車：トランプチ氏なしでは株価回復は難しい