Citi has raised Yongda Auto's revenue forecast for each year from 2024 to 2026 by 3% to 28%.
According to the report from 21st Century Business Herald APP, Citigroup released a research report stating a "buy" rating for Yongda Auto (03669). Due to the increase in the proportion of business related to Huawei, the revenue forecasts for each year from 2024 to 2026 have been raised by 3% to 28%, with gross margin forecasts adjusted to 8.7%, 9.2%, and 9.6%, and the target price has been raised from HK$1.92 to HK$2.98.
The report mentioned that the company's management recently held a conference call with investors to discuss the performance of Huawei Hongmong Smart Drive dealerships and the outlook for next year's new energy vehicle (NEV) business. It was revealed that they expect to have 7 Huawei Hongmong Smart Drive stores by the end of this year. The bank anticipates that Hongmong Smart Drive will need to collaborate with more dealers to expand sales volume, expecting Yongda's Huawei Hongmong Smart Drive stores to increase to approximately 40 to 50 by next year.
