EQS-News: [MeiDong Auto] Goldman Sachs initiated coverage on MeiDong Auto (1268.HK) at Buy with TP of HK$10.1

Goldman Sachs initiated coverage on MeiDong Auto (1268.HK) at Buy with TP of HK$10.1

Goldman Sachs initiated coverage on China MeiDong Auto Holdings Limited (1268.HK) on the 14^th November at Buy, with a target price of HK10.1, representing an upside of 27.4% from the closing price of HK$7.93 as at 15^th November 2019.

Goldman Sachs sees MeiDong has long term competitive potential of its unique Single City Single Store strategy ("SCSS"), operating primarily the exclusive outlets for BMW, Lexus, Porsche, and Toyota brands among lower tier cities.

Goldman Sachs also highlights that by representing these top brands in their traditionally under-penetrated locations, MeiDong has achieved strong pricing power in car sales, superior cash conversion, and a sticky customer retention during or even after warranty.

The 12-month target price of HK$10.1 was calculated based on an equal blend of 10x 2023E P/E and 7x 2023E EV/EBITDA.