MEMTECH INTERNATIONAL LTD
BOL.SI
Memtech International - China car sales up 26% YoY in July
- According to the China Association of Automobile Manufacturers, the production and sales of passenger cars reached 1.7m and 1.6m respectively in July. This was 3.0% and 10.1% down MoM, or 31.8% and 26.3% up YoY.
- While we are concerned with the MoM decline in passenger car production (in light of Memtech’s QoQ drop in automotive segment revenue in 2Q), we note that the government’s tax reduction is due to expire at the end of the year and that a boost in production and sales in 4Q may be possible.
- According to the Wall Street Journal, many dealers have put countdown timers in their stores and websites to encourage consumers to buy cars sooner.
- Overall, we keep to our forecast of ~7% YoY growth for Memtech’s automotive segment FY16 revenue.
- Maintain HOLD with a fair value of S$0.48.
Deborah Ong
OCBC Investment
|
http://www.ocbcresearch.com/
2016-08-31
OCBC Investment
SGX Stock
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0.480
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0.480
