Event:
The company released March production & sales today: It sold 12451 motors in March (+65.4% mom or +12.3% yoy), of which, 3427 motors were Quanshun commercial vehicles (+62.03% mom) and 5343 were JMC light trucks (+103.4% mom).
Our Analysis and Estimation:
March sales hit the summit of recent years, of which light trucks contribute greatly;
Prospect of new products is under expectation;
Q1 2009 performance is expected to be better than expectation;
Investment Suggestion:
We forecast the company’s 2009-2010E EPS to be Rmb0.82 and Rmb0.8 respectively. Considering its nice growing capacity and relatively high return to shareholders as well as the rebounding valuation, the company’s fair valuation is predicted at ~23x, representing share price of Rmb18.9; “Recommended” rating is hereby kept.