Deutsche Bank Markets Research Rating Company Date 30 August 2017 Hold SAIC Motor Alert Results Asia China Reuters Bloomberg Exchange Ticker Price at 29 Aug 2017 (CNY) 30.20 Automobiles & 600104.SS 600104 CH SHH 600104 Price target - 12mth (CNY) 28.35 Components 52-week range (CNY) 32.69 - 21.13 Shanghai Composite 3,363 1H17 in line; Hold on mild growth Vincent Ha, CFA Fei Sun, CFA outlook Research Analyst Research Analyst (+852 ) 2203 6247 (+852 ) 2203 6130 6% earnings growth on rising SG&A ratio and soft JVs contribution
[email protected] [email protected] SAIC Motor released its 1H17 results after market close on 29 August. The company’s 1H17 net revenue grew by 13.0% YoY to RMB393.0bn, on the back Stock data of 5.8% growth in vehicle sales volume to 3.2m units during the period. Meanwhile, SAIC’s 1H17 gross profit grew by 18.6% YoY to RMB51.6bn with Market cap (CNYm) 352,841 62.3bps YoY gross profit margin improvement, possibly due to decent sales for Market cap (USDm) 53,130 new local brand models such as Roewe RX5 SUV, Roewe i6, MG ZS, and Shares outstanding (m) 11,683.5 Baojun 510, in our view. However, with 1) 21.1% YoY increase in SG&A Major shareholders SAIC Group expenses and 2) only 3.7% YoY increase in profit contribution from its (71.2%) JVs/associates, 1H17 net profit only increased 6.0% YoY to RMB16.0bn. On a Free float (%) 17 quarterly basis, SAIC’s 2Q17 net profit reached RMB7.7bn, implying an 8.0% Avg daily value traded 141.9 YoY growth (-6.8% QoQ due to seasonality), on 8.9% YoY increase (8.3% QoQ (USDm) drop) in vehicle sales.