The Zhitong Finance App learned that Citigroup released a research report stating that it maintains the “buy” rating of Dongfeng Group (00489) to reflect attractive risk rewards. However, considering that sales of internal combustion engines (ICE) were lower than expected and the risk of economic recession increased, the 2023-25 sales forecast was lowered from 280/290/3.2 million units to 200/190/1.8 million units, and the target price was reduced from HK$10.21 to HK$6.03.

The bank said that due to the above reduction in sales forecasts, the investment income forecasts for joint ventures or associated companies from 2023 to 2025 were lowered by 34 to 59 percent to 8.2 billion, 7 billion and 6 billion yuan respectively. The gross margin assumptions for 2023 to 2025 were 11.8, 13.3 and 14% respectively, and the net profit forecast was lowered from 12.2 billion, 14.3 billion and 13.8 billion yuan to 6.9 billion, 7 billion and 8.04 billion yuan respectively.