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Friday, 3 November 2017

Guangzhou Automobile Group (2238.HK)

3/11/2017

State-owned automobile group engaged in diversified business including R&D and manufacturing for vehicles (automobiles and motorcycles) and parts, automotive trade services, automotive financial services etc. GAC owns or has directly invested in dozens of businesses, including GAC Motor, GAC Honda, GAC Toyota, GAC Mitsubishi, GAC Fiat Chrysler, GAC Engineering etc.

metrics
  1. last done 19.36 hkd
  2. market cap 180965m hkd, 31.6b sgd
  3. pe 12.55, pb 2.15
  4. total debt to equity 33.8%, current ratio 1.44
  5. dividend yield 1.97%, 5yr cagr 27.7%, consistent
  6. 5yr cagr: revenue 30.7%, earnings 40.8%, consistent
  7. strong cash flow
operations
  1. 5 business segments
    1. R&D
    2. manufacture of vehicles and motorcycles
      1. joint ventures with honda, toyota, Fiat-Chrysler, Mitsubishi and GAMC
      2. hybrid and full-electric vehicles
      3. joint venture Wuyang-Honda - motorcycles
    3. parts and components
    4. commercial services
    5. financial services
  1. growth seems more from SUVs, growing 61% yoy in 1H2017
  2. electric vehicle sales and production growth 14.4% and 19.7% in respectively 1H2017
investment thesis
  1. established brands
  2. value chain in automobile industry
  3. cheap relative to peers
risks
  1. slow down in China vehicle industry
at
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