Citi: Raises GAC Group H-share target price to HK$2.7

Citi issued a research report stating that it raised the target price of GAC Group's H-shares from HK$2.3 to HK$2.7, and raised the target price of GAC Group's A-shares from RMB 5.6 to RMB 5.9. GAC Group announced the acquisition of a 50% stake in FAW Toyota held by FAW Group through the issuance of new A-shares at RMB 5.75 per share, along with a simultaneous non-public issuance of A-shares to raise supporting funds. The bank noted that the central-local state-owned enterprise cooperation between FAW and GAC can generate broader industrial synergies, including supply chain integration and R&D cost sharing, which would benefit GAC's own-brand operations. Management believes the transaction can revitalize asset quality, improve the listed company's operating performance, and enhance long-term sustainable shareholder returns, and is a response to deep industry transformation, rapid technological iteration, competitive landscape restructuring, and the "15th Five-Year Plan" encouraging mergers and acquisitions and cross-regional integration to address homogeneous competition.