Morgan Stanley published a research report that first gave the Changfeng sedan an "overweight" rating and a target price of 6 yuan, which is equivalent to 12.6 times the price-to-earnings ratio in 2011, indicating that it can benefit from the huge growth of the mainland market (it has a market share of more than 43% of China's heavy-truck market). And with better pricing power, its gross profit is expected to maintain 25% to 27%, and its profit is expected to grow at a compound growth rate of 35.65% from 2010 to 2012.

Tai Mo refers to the fact that in the "most awesome" situation, the Liaochang Fengfeng sedan can be expected to reach 9 yuan, which is the most optimistic price-to-earnings ratio of 18.3 yuan. based on the rapid growth of the heavy truck market in the mainland, it is expected that it will be able to further increase its market share and further control costs.

Morgan Stanley estimates that Changfeng's earnings per share for 2010-2012 are 0.34, 0.42 and 0.51 respectively, indicating that the current price is equivalent to the forecast 2011 price-to-earnings ratio of 9.9 times, price-to-book ratio of 1.8 times, and return on equity of 20.9%.

Changfeng axle fell 0.21 per cent to HK $4.78 yesterday.