[ET Net News Agency, 6 November 2019] UBS Global Research lifted its target price for
Geely Automobile (00175) to HK$16 from HK$13.6 but downgraded its rating to "neutral" from
"buy".
The research house believes the potential earnings recovery in the near term has been
well priced in after a 50% share price rally in the past two months. Geely's long-term
strategy remains solid.
However, structural headwinds faced by local brands, increasingly challenging regulatory
requirements, and the visibility of overall market recovery lead to the downgrade, UBS
said.
UBS adjusted its earnings estimates slightly, especially for 2019 to factor in its
lowered earnings estimates for 2H. Its forecasts suggest a 40%/20% earnings recovery
in 2020/21. (KL)