14 Aug 2019 CMB International Securities | Equity Research | Company Update CIMC Vehicles (Group) (1839 HK) World’s largest semi-trailer manufacturer BUY (Initiation) Target Price HK$6.90 Summary: We initiate coverage on CIMC Vehicles with BUY rating and a TP of (Previous TP -) HK$6.9, based on 5x EV/EBITDA ratio. The current valuation of 3.5x 2019E Current Price HK$4.87 EV/EBITDA should have reflected the low earnings growth expectation. With Up/Downside +42% global presence and solid balance sheet after IPO, we see room for CIMC Vehicles to expand market share through capacity expansion and acquisitions. China Capital Goods Company background. CIMC Vehicles primarily engages in the manufacture and sale of semi-trailers and truck bodies for specialty vehicles in China, North Wayne Fung, CFA America, Europe and other regions covering >40 other countries. The (852) 3900 0826 Company has been the world’s largest semi-trailer manufacturer for the 5th
[email protected] consecutive year in terms of total sales volume since 2013. According to Frost & Sullivan, by sales volume of semi-trailers, CIMC Vehicles ranked first in the semi-trailer industry in China, with a market share of 15.7% in 2017. In North Stock Data America, the Company ranked among the top five semi-trailer manufacturers Mkt Cap (HK$ mn) 8,596 Avg 3 mths t/o (HK$ mn) n/a in 2017. CIMC Vehicles has been listed on the HKEx since Jul 2019. 52w High/Low (HK$) 6.34/4.00 Global presence after series of acquisitions. Since 2002, CIMC Vehicles Total Issued Shares (mn) 1,805 Source: Bloomberg has strategically expanded its geographic coverage in China, North America and Europe through series of acquisitions.