DONGFENG GROUP Reports Approximately 1.6% Year-over-Year Decline in Total Car Sales for 10M25

The analyst rating of "Overweight" for DONGFENG GROUP (00489.HK) is based on the company's recent sales trends, which include a 7% increase in average selling price (ASP) and elevated sales reaching 150,000 units. Additionally, Morgan Stanley projects a 15% year-over-year revenue growth for FY2025, leading them to raise the company's target price by 5.6%, from HK$10.65 to HK$11.24.

The analyst rating from Morgan Stanley is based on several key factors: 1. Increased Revenue Forecast: The firm raised its FY2025 revenue forecast for DONGFENG GROUP by 15%, reflecting positive sales trends and management guidance. 2. Sales Volume Estimations: Sales volume estimations were increased to 150,000 units, indicating strong expected demand. 3. Average Selling Price Increase: There was a reported 7% increase in the average selling price, which contributes positively to revenue. 4. Management Insights: Key points from a management meeting highlighted plans to upgrade most existing models in 2025, which supports the sales target and helps maintain stable average selling prices. 5. Future Growth Potential: Management's goal of achieving 50-80% year-over-year sales growth in 2026, driven by the launch of new models, suggests strong future performance. These factors collectively led Morgan Stanley to upgrade its target price from $10.65 to $11.24 and maintain an "Overweight" rating on the stock.

The analyst rating from Morgan Stanley is "Overweight" for Dongfeng Group, primarily due to the following reasons: 1. Accelerating Spin-off Process: The submission of detailed listing application documents by VOYAH signals that Dongfeng Group is accelerating its spin-off process, which is viewed positively as it could enhance the stock price. 2. Healthy Business Progress: VOYAH's business is performing well, with overall revenue exceeding market expectations, indicating strong operational performance. 3. High Gross Profit Margin (GPM): VOYAH's GPM for the first seven months of 2025 reached 21.3%, which is competitive within the industry and reflects efficient cost management. 4. Reasonable Expenses: The sales and administrative expenses of around RMB3 billion are considered reasonable compared to other new entrants in the market, suggesting effective financial management. 5. Potential for Shareholder Value: If Dongfeng Group successfully privatizes, Morgan Stanley estimates that each share could be valued at around HKD10.65, indicating potential upside for investors. These factors collectively contribute to Morgan Stanley's positive outlook on Dongfeng Group's stock.