Citibank has raised its sales forecast for each year from this year to 2026 by 4% to 5%, to 1.88 million, 1.8 million, and 1.76 million vehicles respectively.
According to the Zhichun Finance APP, Citibank released a research report stating that considering the potential cooperation with Xiaomi Group-W (01810) and dividends as catalysts, the target price for Dongfeng Group (00489) has been raised from HKD 3.89 to HKD 6, with a 'buy' rating. The bank has also raised its sales forecast for each year from this year to 2026 by 4% to 5%, to 1.88 million, 1.8 million, and 1.76 million vehicles respectively, based on sales trends in the first ten months of this year.
The bank stated that it has revised down its forecast for investment income from jointly owned enterprises to RMB 1.57 billion (same below), RMB 0.71 billion, and RMB 0.69 billion respectively; it also adjusted its loss forecast from the original RMB 3.34 billion, RMB 3.16 billion, and RMB 2.23 billion to a profit of RMB 0.75 billion, a loss of RMB 2.58 billion, and a loss of RMB 2.46 billion respectively. The bank has also raised its gross margin forecast due to better economies of scale and cost reductions. This adjustment in company valuation is mainly due to three factors: dividend discount, the valuation of Dongfeng's high-end electric vehicle brand Lantu, and potential cooperation with Xiaomi.
