Not vested
Mainland auto stocks may be volatile but offer good prospects as more Chinese can afford to buy.
Dongfeng (0489), for instance, hit HK$7.90 in October 2007, then dived 83 percent to HK$1.31 a year later.
Fast forward to April last year, when it soared to HK$14.36, then tumbled 46 percent to HK$7.67 in two months. Since then, it has gained 141 percent, hitting a historical high of HK$18.50 in October. During the next six months, it fell 35 percent to HK$11.9 and is now trading at HK$14.
Japan's earthquake had delayed the launch of new models. But Dongfeng expects sales to pick up late this year or next year. Nomura has set a target of HK$18 for this carmaker.
It currently trades at 9.4 times historical earnings. If it dips near HK$13.70, its 10 and 20-day moving average, it is worth a punt with a view to a 15 to 20 percent profit.
http://www.thestandard.com.hk/news_deta ... 10627&fc=1