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<Research> JPM Maintains Neutral on GAC GROUP (02238.HK), TP HKD3.3
JPMorgan issued a research report stating that GAC GROUP (02238.HK) recorded 1Q revenue growth of 11% YoY and sales growth of 2% YoY. However, gross margin remained close to break-...
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<Research> JPM Maintains Neutral on GAC GROUP (02238.HK), TP HKD3.3
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JPMorgan issued a research report stating that GAC GROUP (02238.HK)  +0.060 (+2.317%)    Short selling $840.28K; Ratio 4.733%   recorded 1Q revenue growth of 11% YoY and sales growth of 2% YoY. However, gross margin remained close to break-even at only 0.9%, down 1.1 ppts YoY, affected by cost inflation and weak sales volume. Net loss during the period narrowed by 10% YoY, while losses from proprietary brands continued to be the key structural drag on overall profitability.

Management plans to launch more than 11 new or facelifted models in 2026, focusing on upgrades in new energy vehicles, targeting a 25% reduction in mass-production model costs, and striving to double overseas sales volume. The broker welcomed managements initiatives but adopted more conservative assumptions amid intense competition in China and global markets, expecting GAC to turn profitable only in 2027.

JPM maintained its Neutral rating on both the H shares and A shares of GAC GROUP. The TP for the H shares is HKD3.3, while the TP for GAC GROUP (601238.SH)  0.000 (0.000%)   A shares is RMB8, based on projected 2026 price-to-book ratios of 0.3x and 0.8x respectively, reflecting short-term competitive pressures and a long-term recovery trend. (ec/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-22 16:25.) (A Shares quote is delayed for at least 15 mins.)

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