The latest Market Talks covering the Auto and Transport sector. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
0803 GMT - XPeng's gross profit margin will be further supported by its collaboration with Volkswagen, Deutsche Bank analyst Bin Wang writes in a note. XPeng expanded its cooperation with Volkswagen on electrical/electronic architecture to a global scale from a focus on China's platform, which Wang says is faster than the bank expected. The automaker will likely witness higher revenue from technical research and development service in 2H, thanks to the upgraded collaboration, DB adds. XPeng could receive around CNY150 million in revenue from its E/E architecture collaboration with VW each quarter, which should further support its double-digit gross margin, the analyst says. DB estimates that XPeng's 2Q net loss likely narrowed on quarter to CNY1.3 billion. It maintains a buy rating on the stock, with a target price of HK$50.00. Shares are last at HK$33.95. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
0716 GMT - For Porsche, it seems that "when it rains, it pours" as production delays caused by supply issues of aluminum alloys is the latest in the series of woes weighing on its stock price, Bernstein analysts write. The delays, caused by flooding at a Swiss supplier, will result in a loss of at least 10,000 units and mean Porsche will be questioned over its cluster risk management that has left it so vulnerable to one critical supplier, the analysts say. Whether self-inflicted or genuinely outside its control, Porsche's problems have significantly tarnished what had been an extremely successful IPO in September 2022, they add. Shares fall 6.5% to EUR67.90, which is significantly below its post-IPO high of EUR120 reached in May 2023. (adam.whittaker@wsj.com)
0633 GMT - JSW Infrastructure's long-term growth outlook seems brighter, BNP Paribas Securities India analyst Priyankar Biswas says in a research report as the brokerage raises the stock's target price by 18% to INR360.00 with an unchanged outperform rating. The port operator's acquisition of a majority stake in Navkar has given it an entry into India's rail container space, the analyst says. Also, its establishment of rail terminals at Tamil Nadu and possible further acquisitions in the rail container space could add scale to its inland operations, enabling the Indian company to transition into an integrated port logistics play, the analyst adds. Shares are 3.5% higher at INR328.45. (ronnie.harui@wsj.com)
0433 GMT - Nomura analysts cut Singapore Airlines' core earnings forecast for FY 2025 and 2026, and now expects falls of 21% and 8%, respectively, citing rising fuel prices and lower cargo yields. Geopolitical tensions affecting tariffs and uncertainty surrounding the U.S. presidential elections could also weigh on SIA earnings, they say. They downgrade their rating to neutral from buy and say the stock lacks catalysts; SIA's target price is cut to S$6.75 from S$9.17. SIA shares were recently at S$7.07. (rthvika.suvarna@wsj.com;@RthvikaS)
0343 GMT - Bangkok Expressway & Metro should benefit from likely extension of its concessions for the toll and metropolitan rapid transit businesses after it signed a contract for the MRT Orange Line in Thailand, Maybank Securities (Thailand) analyst Boonyakorn Amornsank says in a research report. The Thai operator of expressway and MRT lines in Bangkok is also expected to receive an additional 22-year concession for toll collection in exchange for constructing a double-deck expressway, the analyst says. The brokerage estimates a positive net present value of THB13 billion for the company from the double-deck expressway. It raises the stock's target price to THB10.80 from THB9.40 with an unchanged buy rating. Shares are 0.6% lower at THB7.80. (ronnie.harui@wsj.com)
0323 GMT - Transurban's likely contract win to widen the Logan Motorway in Queensland counters investor pushback over the tollroad owner's perceived lack of options for growth in Australia, Citi says. Transurban said it has advanced to the Binding Upgrade Proposal stage with the Queensland government. This involves agreeing to the final scope and funding model for the project. Analyst Suraj Nebhani says the announcement is a positive, given investors had been unsettled by Australia's competition regulator blocking Transurban from taking part in the sales process of the Eastlink toll road in Melbourne. "While the project needs to go through the remaining approval stages, we see these as being less problematic given the need for reducing congestion in Brisbane and increasing road capacity in time for the 2032 Olympics," Citi says. (david.winning@wsj.com; @dwinningWSJ)
0211 GMT - MISC may post a stronger 2Q core net profit on year, AmInvestment Bank analyst Muhammad Nuur Ashman says in a note. He tips 2Q core net profit at MYR695 million, 1% lower sequentially but 43% higher on year, as last year's profit was weighed by lower earnings for its floating production storage and offloading vessel Mero 3 construction as well as its marine and heavy engineering segment's losses. Spot and three-year time charter rates for liquefied natural gas and petroleum shipping improved in April to May amid robust demand and may support 2Q earnings, he reckons. Despite an optimistic near-term outlook, AmInvestment Bank maintains a neutral rating on MISC, citing full valuations. The bank has a MYR8.60 target price on the stock, which is unchanged at MYR8.51. (yingxian.wong@wsj.com)
1133 GMT - Alstom is expected to post higher sales and lower orders for its fiscal first quarter, according to consensus estimates provided by Visible Alpha. The French train maker is expected to post sales of EUR4.43 billion for the quarter to June, up from EUR4.175 billion from the same period of the prior year, according to the Visible Alpha consensus. Orders are anticipated at EUR3.78 billion, a decline from EUR3.875 billion in the same period last year, the consensus estimates show. Shares trade 1.9% higher. (nina.kienle@wsj.com)
(END) Dow Jones Newswires
July 23, 2024 04:20 ET (08:20 GMT)
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