<News Alert>: Nov-21 sequential sales improvement implies momentum is recovering

  • Latest Nov-21 total vehicle sales posted 22% m-o-m expansion, implying supply of critical parts and components is picking up gradually
  • Marginal 11M21 total volume sales growth implies company could miss full-year sales target growth of c.16%, due to supply chain disruption and auto chip shortage
  • Anticipate company to accelerate vehicle production on availability of critical parts and components in coming months to execute strong orders on hand
  • Certain bright spots including Lynk & Co (+c.10% y-o-y in Nov-21) and NEV sales (+c.137% y-o-y). Geely is also ramping up its high-end EV brand – Zeekr since launch in 2H21

What’s new

Geely has released its Nov-21 vehicle volume sales statistics. Nov-21 total volume sales declined c.10% y-o-y but was 22% higher m-o-m to about 136,000 units, as shown in the chart below. This implies the situation is gradually improving with supply of critical parts and components picking up. For 11M21, total volume sales were relatively flattish at c.1.17m units, due to shortage of auto chip and supply chain disruption in 3Q21 which had dragged on its operations. 

However, Lynk & Co and the NEV segment are some of the bright spots for the group, with sales up c.10% y-o-y and c.137% y-o-y respectively in Nov. For 11M21, Lynk & Co recorded some 29% volume sales expansion while NEV sales were robust at c.48% growth. Export sales also posted good growth of 61% y-o-y for 11M21. Besides, the company is ramping up Zeekr from c.200 units in Oct-21 to over 2,200 units in Nov-21.

While Geely is expected to miss its 2021 sales target, we believe the company’s operation to continue to improve on the availability of critical parts and components in the coming months to fulfil its orders on hand.

We currently have BUY rating and TP of HK$34