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Monday, April 7th, 2025

Geely Accelerates Earnings with Strong EV Sales and Buoyant Export Growth

Date: 3 October 2024
Broker Name: UOB Kay Hian


Geely’s Earnings Growth Outlook

Geely is entering a period of significant earnings growth, fueled by its robust product line-up and strong export growth. The company is capitalizing on both domestic and international demand, with particular strength in its electric vehicle (EV) segment.

Strong EV Line-Up and Order Flow

Geely has recently launched several new EV models, including the Galaxy E5, Xingyuan, and Zeekr 7X, which have received strong order flows. These models are expected to significantly contribute to the company’s sales growth, particularly as demand for EVs continues to rise globally.

Expansion of Mass-Market EV Models

Going forward, Geely plans to expand its offering of mass-market EV models, especially in the plug-in hybrid electric vehicle (PHEV) segment. The company is positioning itself to capture market share from established incumbents in this growing sector, further boosting its earnings potential.

Target Price and Valuation

UOB Kay Hian has raised Geely’s target price from HK$13.00 to HK$21.50. This increase is based on the company’s strong earnings outlook and a target 2025 forward price-to-earnings (PE) multiple of 20 times, which reflects a three-year historical mean. This is a significant upgrade from the previous target PE multiple of 12 times, attributed to the lower market discount rate.

Share Price Catalysts

  • Strong Monthly Sales: Geely’s monthly sales figures are expected to remain robust, driven by the success of its newly launched EV models.
  • 3Q24 Earnings Results: Anticipated strong performance in the upcoming quarterly results, likely reflecting the company’s recent product launches and increased demand.

Recommendation and Upside Potential

The report maintains a BUY recommendation for Geely, with a revised target price of HK$21.50. This represents a substantial upside of 64.6% from the current share price of HK$13.06 as of 2 October 2024.

Conclusion

Geely is well-positioned to benefit from the growing EV market, with strong product launches and increasing export growth driving its earnings. The company’s focus on mass-market EV models and its ability to capture market share from competitors places it in a strong position for sustained growth. Investors are encouraged to take advantage of this growth potential, with significant upside expected in the coming quarters.

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