Nomura lifted its target price for Geely Automobile (00175) to HK$34.4 from HK$34.2, and reiterated its "buy" rating.
The research house remains positive on Geely as its robust results show fundamental improvements on all fronts: sales volume +63%, ASP +7%, GPM +1.1pp, SG&A expense ratio -1.9pp, improving finance expenses on successful loan refinancing, increased dividend payout, and improving workng capital.
Currently Lynk 01 has a backlog of >30k units, equivalent to 5 months at the current production rate (6k units/month). Geely remains confident Lynk's capacity bottleneck will
be gradually resolved as its new Zhangjiakou plant is due to start commercial production soon.
Nomura raised both FY2018/19 EPS forecasts by 2% to reflect recent sales momentum, with
its sales volume assumptions at 1.66mn/2.0mn units (+33%/+20%).
22/03/2018 14:20
[I-bank focus]Nomura ups Geely Automobile (00175) to HK$34.4
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