[ET Net News Agency, 22 March 2018] HSBC Global Research lifted its target price for
Geely Automobile Holdings (00175) to HK$33 from HK$30 on earnings revision, and reiterated
its "buy" rating.
The research house raised now forecast an earnings trajectory that is both stronger and
longer (31% FY2017-19 earnings CAGR). It expects Geely's strong product pipeline combined
with its structural cost-cutting through the use of shared platform architectures with
Volvo to allow Geely to achieve lower production costs while at the same time maintaining
a strong product pipeline.
HSBC believes that through the use of Geely/Volvo's new platform architecture (CMA) and
future EV architecture, Geely will be able to lower opex throughout various model cycles
at the cost of higher initial capex. HSBC raised its earnings estimates by 8% for FY2018,
and by 7% for FY2019. (KL)