Motors downgraded Volkswagen Finance (00626-HK) from overweight to neutral and lowered its target price from HK $5 to HK $4. The bank remains concerned about the deterioration of credit quality and the possibility of continued fierce competition this year.

Motors said it made a profit of 375 million yuan in 2011, down 17 per cent year-on-year and 8 per cent below the bank's expectations. Current price in 2012 price-to-book ratio of 0.6 times, I believe that the decline is limited, but the lack of catalytic factors, 13 times price-to-earnings ratio is reasonable.

Volkswagen Finance fell 1.12% to HK $3.52.