DBS Group Research analysts Woon Bing Yong and Derek Tan have initiated “buy” on Hong Leong Asia with a target price of $1.14 due to its “promising” long-term growth story.

This is supported mainly by three factors, write the analysts in their June 7 report.

First, sales volumes in Hong Leong Asia’s subsidiary, China Yuchai, could see a surprise on the upside in the 1HFY2021. This is due to the implementation of National VI(a) and Tier-4 emission standards that are expected to elevate purchases of diesel engines in the 1HFY2021 and 2HFY2022.

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