Investment points: FAW Xiali recently released three quarterly results, with a loss of 695 million yuan in the first three quarters, further increasing the loss. On the same day, Xiali released the blockbuster model Junpai D60, which is expected to lead the company to gradually turn around its losses.
Summary of the report: Xiali and FAW Toyota have entered the new product launch cycle and passed the worst period. Xiali released the Junpai D60 small SUV on October 28th, which is priced at 6.49-99900 yuan and uses Toyota power system, which has a cost-effective advantage. Sales of the car are expected to reach 50, 000 next year. Lead Xiali to double its sales next year. FAW Toyota launched the new Corolla in the second half of the year and will launch a new crown next year, which will also lead the company's sales out of the trough.
FAW Group listed as a whole, either dead or alive. FAW Xiali relies on FAW Group, the most profitable automobile group in China, and FAW Group has sufficient resources to help and save FAW Xiali, otherwise FAW Xiali has no choice but to perish. The overall listing is not only an important measure for the reform of state-owned enterprises, but also a major measure to save FAW Xiali.
We believe that the overall listing of FAW has entered the last minute. First of all, according to the previous commitment of FAW shares, we will strive to complete the competition between FAW shares and FAW Xiali by April 5, 2015, with only half a year left. Secondly, at present, China's six major automobile industry groups (BAIC, SAIC, FAW, Guangzhou Automobile, Dongfeng Automobile, Changan Automobile) BAIC has submitted IPO, only FAW has not completed the overall listing, which Brooks no delay. Thirdly, at present, the two main tasks in front of the listing of FAW Group as a whole: FAW-Volkswagen stock ratio adjustment and FAW Group personnel adjustment have broken the ice, and it is expected that the follow-up stimulus will continue. At this stage, the company's stock price can produce obvious relative returns.
Investment advice: FAW Toyota expects to bring the company a net profit of 650 million this year, valuing it at 12 times GAC's 2014 price-to-earnings ratio, with a market capitalization of 7.8 billion. Xiali brand refers to the market value of listed enterprises of other independent brands in China, the minimum is Haima car is 8 billion yuan, because Xiali loss we calculate according to 50% that is 4 billion. Then the joint venture and independent two pieces plus FAW Xiali valuation is expected to achieve a market capitalization of 12 billion yuan. At the same time, with reference to the overall listing case of GAC Changfeng, we believe that there is still more than 30% room for follow-up, with a target price of 7.5 yuan.