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<Research>Citi Initiates Coverage on SERES H Shrs w/ Neutral Rating, $140.4 TP; A Shrs Downgraded to Sell
Recommend 24 Positive 44 Negative 22 |
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Citi, in its research report, initiated coverage on SERES (09927.HK) H shares with a Neutral rating and a target price of HKD140.4. In light of unattractive risk-reward, SERES (601127.SH) A shares were downgraded from Neutral to Sell, with the target price revised from the original RMB165.5 to RMB129.1, reflecting revised forecasts and share dilution following the Hong Kong listing. Citi calculated that after listing in Hong Kong, SERES holds net cash of approximately RMB67 billion, with a net cash-to-market-cap of about 0.28x for A shares and 0.34x for H shares, vs 0.68x for Li Auto (LI.US) ADR. Concerns about SERES linger, as the extended-range electric vehicle (EREV) industry lagged behind so far this year. With aging vehicle model cycles and SERES's large exposure to the EREV industry, the company may repeat Li Auto's trend; SERES's golden vehicle model cycle is nearing its end. If it reduces its ASP and enters the mass market, it will face competitive challenges from GWMOTOR (02333.HK), GEELY AUTO (00175.HK), BYD COMPANY (01211.HK), and LEAPMOTOR (09863.HK). AASTOCKS Financial News Website: www.aastocks.com |
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