Ji Shi, an analyst from CMB International Securities, maintained the Buy rating on China MeiDong Auto Holdings. The associated price target is HK$2.80.
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Ji Shi’s rating is based on several key factors that highlight China MeiDong Auto Holdings’ potential for growth and resilience in challenging market conditions. The company’s strong inventory turnover and excellent cost management have resulted in a robust cash flow, which positions it well to endure the slow recovery of dealer profits in China. Additionally, despite facing challenges, MeiDong’s market share for Porsche sales in China has increased, indicating effective strategies that could lead to future profitability as the market recovers.
MeiDong’s ability to maintain a net cash position and benefit from competitors’ store closures further supports its short-term revenue and profit prospects. The projected improvement in gross margins for brands like BMW and Porsche, along with expected revenue stabilization in the coming years, underpins the Buy rating. Ji Shi anticipates a significant increase in net profits for FY26-27, driven by improved margins and strategic market positioning, although potential risks include lower-than-expected sales or sector-wide downturns.