[ET Net News Agency, 18 August 2020] Daiwa Research lowered its target price for Geely
Automobile (00175) to HK$16.4 from HK$17 and maintained its "hold" rating.
The research house said Geely's 1H results were lower than expectations. But its gross
margin was resilient with just 0.7pp dip to 17.1%. Management expects better blended ASP
and gross margin in 2H than 1H, driven by an improved product mix and higher sales volume.
Daiwa expects the new model Haoyue, ICON and a new model FS11 (to be launched in
September) to contribute higher volumes in 2H. It lowered its 2020 gross margin 17.5% from
18% previously, and expects gross margin to rise to 17.8% in 2H from 17.1% in 1H.
Geely expects its A-share STAR board listing to be completed in the next few months.
Daiwa expects the A-share listing price to lead to positive sentiment, but sees it being
balanced by a potential sell-off after listing. It lowered its 2020-22 EPS forecasts by
3-11% to reflect its new sales guidance and 1H results. (KL)
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00175 GEELY AUTO
Nominal 
10.600 +0.420 (+4.126%) Research Report
18/08/2020 11:21
{I-bank focus}Daiwa cuts Geely Automobile (00175) to HK$16.4
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