abugarciaorangemax3| [Broker Focus] BOCOM cut the target price of Ideal Automobile (02015) by 37.6% to HK$120.34 and lowered its sales forecast in the past two years

Jinwu Caixun| Bank of Communications International Research Reportabugarciaorangemax3, Ideal Automobile (02015)'s first-quarter results fell short of expectations, while management announced that the release of the pure tram model will be postponed until next year. Therefore, the bank lowered its sales forecasts for 2024 and 2025 by 15% and 35% respectively, mainly considering the postponement of the launch of pure electric vehicles and the weak recovery in demand for L7/L8/L9 modified models amid intensified market competition.

Since the beginning of this year, Ideal's share price has adjusted back to more than 50%, which the bank believes is enough to offset some of the negative impact of fundamentals. Ideally, the current market-to-sales ratio in 2024 will be 1 times (1.0% in peers)abugarciaorangemax3.1-1.3 times), while the ideal average monthly delivery in the second quarter was about 30,000 units, cash was 98.9 billion yuan, and a gross profit margin of ~20%, which is still better than that of its peers. The bank believes investors may start to rethink the possibility of more positive signals in the next few months, such as orders improving on a monthly basis.

Based on adjustments for revenue and profits, the bank lowered its target price from HK$192.8/US$49.1 to HK$120.34/US$30.9 based on a price-to-sales ratio of 1.5 times in 2024. Maintain buying.