Morgan Stanley: If GAC Group (02238.HK) and FAW's joint venture relationship materializes, it may accelerate industry consolidation; maintain "Overweight" rating.

Zhito Finance APP has learned that Morgan Stanley released a research report stating that, according to a weekend report by Caixin, FAW Group may acquire equity in GAC Group (02238.HK) through asset allocation and other means, and the two companies will form an associated relationship. However, neither company has commented on this. The bank believes that if the restructuring is ultimately implemented, it may accelerate industry consolidation against the backdrop of overcapacity concerns. Morgan Stanley maintains an "Overweight" rating on GAC Group, with a target price of HKD 2.7, implying 26% upside from the closing price of HKD 2.14 on September 11.