江铃汽车(000550.CN)

Jiangling Motors -A:Sales still sluggish,maintain Neutral

时间:16-07-05 00:00    来源:瑞银证券

Sales fell by a worse-than-expected 10.8% YoY in H116

The company sold 121,000 vehicles in H116, down 10.8% YoY and undershooting ourfull-year estimate of a 5% decline. By product, sales of Ford commercial vehicles were31,565 units (-5.5% YoY); JMC light-duty trucks, 50,237 units (-16% YoY); JMCpickups, 27,819 units (-4.5% YoY); and Yusheng SUVs, 5,755 units (-47.3% YoY). InQ1, the company sharply stepped up promotions of existing models to boost sales, butthese efforts failed to deliver noticeable results. We chiefly attribute the company'songoing sales slump to: 1) significant pressure on its truck sales due to China'seconomic slowdown; 2) inability of new models (such as the Everest) to makemeaningful sales contributions in the near term, due to channel-related deficiencies andniche positioning; and 3) existing models losing competitiveness due to aging.

Everest sales stayed sluggish, sharply missing market expectations

Launched in Q415, the Everest was Ford's first SUV made with Jiangling. Despite themarket's high initial hopes, this model posted cumulative sales of just 1,852 units inH116. Not only was this nowhere near the market's estimate of 2,000 units per month,but it also missed our own estimate of 600 units per month. We think this was mainlydue to: 1) As an off-road SUV with a niche positioning, the Everest appeals to arelatively small group of consumers; and 2) the Everest is currently sold via the samechannels as the Ford Transit, including just 100-110 4S dealerships. The low dealershipcount and being sold alongside commercial vehicles makes it challenging to market theEverest in a targeted manner. The company began a 'no-purchase-tax' promotion forthis model in April, but this move has been unsuccessful in boosting sales.

We expect limited near-term sales contribution from the Ford Tourneo

The Tourneo (a new MPV based on the Transit) was launched in May. It caters to thehigh-end commercial market, competing in the same space as SAIC GM's Buick GL8.Only two versions, both with manual shifting, were released at launch, and they arepriced at Rmb177,000 and Rmb204,000, respectively. Given that only manual shiftingis available initially, together with SAIC GM's major advantages in terms of channels,sales capabilities and brand power, we are cautious on the Tourneo's sales. We forecastaverage monthly sales of ~1,000 units.

Valuation: Maintain Neutral, Rmb27 price target

Our price target is based on DCF and assumes an 8% WACC.