Jefferies says Valeo best placed for China slowdown, cuts Dauch to 'hold'

** Jefferies says auto parts sector's valuations are "already depressed" but warns a slowing Chinese market leaves little scope for a recovery as exposure to the higher-margin market dwindles

** It upgrades Valeo VLOF.PA to "buy" from "hold", seeing it best-placed to manage current environment and points to its China order intake implying a 5x book-to-bill ratio versus 2x-3x for peers

** Jefferies adds Valeo's move into data centre solutions has aided its share price recently, but it needs to see more customer wins before incorporating this into its investment thesis

** The broker cuts Dauch DCH.N to "hold" from "buy" as it faces "slowing momentum" after a strong H1, partly due to disruption linked to GM's truck model changeover, elevated launch costs of new models, and potentially tougher-than-expected delivery of merger synergies