Geely Automobile Holdings Ltd (175 HK): Positioned for Strong Growth with New Model Launches
Recommendation: BUY
- Target Price: HK$13.00
- Date of Recommendation: September 9, 2024
- Broker Company: UOB Kay Hian
Investment Thesis:
Geely is well-positioned for growth with its Zeekr and Galaxy brands showing strong sales momentum. The company’s strategy to launch new EV models and revamp production lines has resulted in robust performance, driving the buy recommendation.
Key factors supporting the investment thesis include:
- Zeekr and Galaxy Sales Growth: Zeekr’s insurance registrations grew by 48% yoy to 4,600 units in the 35th week of 2024, while Galaxy’s registrations quadrupled yoy to 7,000 units. The launch of new models, such as the Zeekr 009 facelift and Zeekr Mix, is expected to further boost sales.
- Production Expansion: Geely’s wholesale shipments grew by 22% yoy to 181,229 units in August 2024, driven by strong domestic demand and new model launches. The company is expected to deliver 2.00 million units in 2024, growing to 2.70 million units by 2026.
Financial Performance:
- Profit Forecast: Geely’s net profit for 2024-2026 is projected at RMB7.57 billion, RMB9.57 billion, and RMB11.65 billion, supported by sales volumes of 2.00 million, 2.35 million, and 2.70 million units.
Valuation and Catalysts:
The target price of HK$13.00 reflects Geely’s strong sales performance and expansion in the EV segment. The launch of new models and the ramp-up of production capacity are key catalysts for growth.
Thank you
