HK Stock Market Move | YONGDA AUTO (03669) falls nearly 4%, Citibank points out that its new car sales gross profit margin in the second half of last year was lower than expected.

YONGDA AUTO (03669) fell nearly 4%, as of the end of the announcement, it fell by 3.95% to HKD 2.19, with a turnover of HKD 26.368 million. On the news front, Citigroup released a research report stating that it has lowered YONGDA AUTO's target price from HKD 2.98 to HKD 2.82, with a "buy" rating. Due to the lower-than-expected gross profit margin of new car sales in the second half of last year, coupled with weak sales of used cars, the bank has lowered its net profit forecast for 2024 to 2026 to RMB 205 million, RMB 645 million, and RMB 818 million, respectively, with gross profit margin forecasts also being adjusted from 8.7%, 9.2%, and 9.6% to 8.5%, 9.1%, and 9.5%. The bank expects YONGDA AUTO's new car sales in the fourth quarter of last year to grow by 30% on a quarterly basis. It is also estimated that the gross profit margin for after-sales service in the second half of last year will be similar to that in the first half of the year. The bank predicts that the company's overall used car sales volume in the second half of last year decreased by 20% year-on-year, mainly due to pressure on retail prices of new cars. Due to sales exceeding expectations in December last year, the bank predicts weak orders in January this year, with new car sales in January expected to decline compared to the previous year.