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<Research>Citi Expects 60-Day Payment to Suppliers to Affect Carmakers' Interest Income w/ LEAPMOTOR, GEELY AUTO Bearing Brunt
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Several Chinese carmakers have pledged to pay suppliers within 60 days in response to China's request to settle most payments with suppliers within 60 days in order to address supply chain challenges caused by long payment terms. Citi has released a report analyzing the cash flow sensitivity of automobile manufacturers and auto parts companies to assess the impact. According to the report, BYD COMPANY (01211.HK), LI AUTO-W (02015.HK), XPENG-W (09868.HK), LEAPMOTOR (09863.HK), and WEICHAI POWER (02338.HK) will have enough net cash to fully cover the difference in cash reduction, though potential interest income may drop. Assuming an interest rate of 2%, the negative impact on this year's net profit forecasts for the automakers will be: LEAPMOTOR > Changan (000625.SZ) > GEELY AUTO (00175.HK) > WEICHAI POWER > SINOTRUK (03808.HK) > Seres (601127.SH) > LI AUTO-W > GWMOTOR (02333.HK) > BYD COMPANY > Yutong (600066.SH). In contrast, the positive impact on this year's net profit forecasts for the auto parts companies will be: Foryou (002906.SZ) > Xingyu (601799.SH) > Bethel (603596.SH) > Sanhua (002050.SZ) > MINTH GROUP (00425.HK) > NEXTEER (01316.HK) > Hesai (HSAI.US) > Xusheng (603305.SH) > Tuopu (601689.SH) > FUYAO GLASS (03606.HK) (600660.SH). AAStocks Financial News |
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