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Jiangling Motors Corporation:Passenger Vehicles to Boom,Low PB and Strong Growth Potential

发布时间:2016-09-07    研究机构:兴业证券

Company Profile

Jiangling Motors Corporation, Ltd. is principally engaged in the manufacture and sale of light vehiclesand relevant spare parts. The Company's principal products consists of Ford transit commercial vehicles,heavy trucks, Kaiyun light trucks, Baodian pick‐up trucks, Yusheng sport utility vehicles (SUVs),etc.

Comments

As a leading light commercial vehicle manufacturer in China, Jiangling Motors firmly implemented itsstrategy to develop passenger vehicle business with Ford’s resources injected. The Company made CNY24.5 billion in revenue in 2015. The net profit attributable to shareholders stood at CNY 2.2 billion. It hitthe market with Everest and Tourneo within a year and optimized distribution network. We expectpassenger vehicle business division to serve as a strong growth engine for JMC.。

Featuring high‐growth, high profitability and low competition in their own segments, Everest andTourneo are gradually gaining popularity on the market. Sales volume of Everest has increased for sevenconsecutive months since tax cut was launched in March and may go beyond 1,000 in Q4.Only manual gear version of Tourneo is currently available on the market. Considering monthly outputof GL8 reached 7,000, we are optimistic about its automatic transmission version which will come nextyear.

Buyers are expected to go for Yusheng 330 (to be launched in Oct) just as other SUVs (Sales of SUVincreased by 55.63% YoY in 16H1). The new type (Yusheng 350) functions better after equipped with

2.0T engine. 80% more was sold in August.Transit has been upgraded and may be available in Q4, to further consolidate JMC’s leadership positionin commercial vehicle segment. JMC lowered price of Transit at the beginning of 2015, which rapidlyraised its market share.

Earnings Forecast and Investment Grading:

Considering its clear development strategy and comparatively low PB, we maintain BUY rating for JMC.We made EPS forecast for it at CNY 1.70 in 2016, CNY 3.27 in 2017 and CNY 3.89 in 2018.Potential Risk: Less‐than‐expected sales of new vehicles, increases losses from trucks.

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