• Buy Entry – 22.5 Target – 26.5 Stop Loss – 20.5
  • Geely Automobile Holdings Ltd is an investment holding company principally engaged in the production and sales of automobiles. The company mainly develops, manufactures and sells automobiles, including cars, sport utility vehicles (SUVs), new energy and electrified vehicles. The company’s car types include home, travel and sports. The company’s new energy and electrified vehicles include electric vehicles, battery electric vehicles, hybrid electric vehicles, mild hybrid electric vehicles and plug-in hybrid electric vehicles. In addition, the Company produces and sells automobile parts and related automobile components. 
  • The recent correction was due mainly to the withdrawal of an application for listing on Shanghai Star Board. This had limited impact on the fundamental business. Therefore, it could be a buy-the-dip opportunity for investors who missed out on the previous rally which was driven by the positive sentiment of the EV sector. 
  • Previously, the company announced some good news. Jidu Auto, the electric vehicle (EV) venture between Chinese search and AI giant Baidu and automaker Geely, will unveil its first model at the 2022 Beijing Auto Show. The 1.56mn units vehicle sales target for this year is intact despite the ongoing chip shortage. The company also formed a JV with Guangdong Xinyueneng Semiconductor to cover the design, manufacturing and sale of integrated circuits, and the manufacturing of discrete semiconductors.
  • Updated market consensus of the estimated growths of EPS in FY21 and FY22 are 62% and 27.2% respectively, which translates to 23.7x and 18.6x forward PE. The current PE is 36.2x. Bloomberg consensus average 12-month target price is HK$27.27.
175 HK (Source: Bloomberg)