baccaratbar| Ideal car profit forecast lowered, target price dropped to HK$113.8, sales forecast also dropped

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[Citibank adjusts its ideal auto profit forecast and lowers its target price] Citigroup in its latest releasebaccaratbarIn the research report, downward adjustmentbaccaratbarMatch the ideal car (02015baccaratbar.HK)'s profit forecast for the next three years ranges from 38% to 51%.

Research pointed out that as market headwinds are expected to continue into 2024, the net profit forecast of Ideal Cars has been reduced from the original figures to RMB 6.7 billion, RMB 7.7 billion and RMB 12.1 billion respectively. Despite market challenges, Ideal Cars still show greater resilience compared with other emerging new energy vehicle brands in terms of customer penetration, cash flow and cash position.

Citibank therefore set its target price for ideal auto H shares from 167baccaratbarHK$.6 was downgraded to HK$113.8, reflecting a forecast P/E ratio of 34 times and 30 times for 2023 and 2024 respectively, but maintaining the buy rating.

In addition, Citigroup has also adjusted its expected sales volume of Ideal Cars from 2023 to 2026, from the original forecast of 570,000, 690,000 and 760,000 units to 480,000, 560,000 and 645,000 units respectively. Factors behind the sales adjustment include a significant decrease in orders after the May Day Golden Week and the postponement of the launch of pure electric vehicle products, which are expected to have a negative impact on the sales of ideal cars in the second half of the year.