[ET Net News Agency, 24 March 2021] Citi Research cut its target price for Geely
Automobile (00175) to HK$51.5 from HK$58.66 and maintained its "buy" rating.
The research house said it remains a long-term buyer of Geely as it sees the biggest
upside swing factor still depends on its new model cycle (BEV zero 01 per order starting
from April).
Citi expects sequential margin recovery ahead under controlled R&D & amortization
spending from 2021. After factoring in sharp costs hike from 2020, Citi now lowered its
2021-23 Geely core EBIT margin forecast to 7/8.4/9% and Lynk NPM (net profit margin) to
3.5/5.5/6.5%. This results in a lower net profit earnings estimate at Rmb8.6bn/Rmb12.2bn,
versus its previous estimate at Rmb13.3bn/Rmb19.5bn. (KL)