Citigroup: YONGDA AUTO (03669) rated as "buy" with target price raised to 2.98 Hong Kong dollars.

Citi released a research report stating that YONGDA AUTO (03669) has been given a "buy" rating, with an increase in the proportion of Huawei-related business, leading to a 3% to 28% increase in revenue forecasts for the years 2024 to 2026. Gross profit margin forecasts have also been adjusted to 8.7%, 9.2%, and 9.6%, with the target price raised from HK$1.92 to HK$2.98. The report mentioned that the company's management recently held a conference call with investors to discuss the performance of Huawei HarmonyOS smart distributor stores and the outlook for next year's new energy vehicle (NEV) business. It was revealed that they expect to have 7 Huawei HarmonyOS smart distributor stores by the end of this year. The bank expects that HarmonyOS smart distributor stores will need to collaborate with more distributors to expand sales, and anticipates that YONGDA's Huawei HarmonyOS smart distributor stores will increase to about 40 to 50 by next year.