The Zhitong Finance App learned that J.P. Morgan released a research report stating that it gave Dongfeng Group (00489) a “neutral” rating, lowered the profit forecast for this year and next two years by 35%/16%, and lowered the target price from HK$3.5 to HK$3.

According to the report, the company's performance in the first half of the year fell short of market expectations, mainly due to falling passenger car shipments and increased operating expenses, which narrowed profit margins. Management lowered the overall sales target for this year by 14%, from 3 million units to 2.59 million units. Of these, the passenger car sales target was lowered by 19%, while the commercial vehicle sales target was raised by 22%.

The bank pointed out that Dongfeng's two joint ventures with Nissan and Honda, as well as its own brands, have limited potential for fundamental improvement. Among Chinese automobile OEM manufacturers, they prefer BYD (01211). Strategically select leading parts suppliers, and it is expected that stock prices may outperform auto OEM manufacturers.