Nomura lowered its target price for Geely Automobile Holdings (00175) to HK$13.74 from HK$14.6 and maintained its "buy" rating.
The research house cited Geely management at the Nomura Investment Forum Asia on 1 June saying that (1) the company regained positive shipment growth in April; (2) GPM could be lower but still outperform most of its peers; (3) ASP should benefit from improving product mix; (4) the new model pipeline is strong with six launches planned for the year; and (5) the new share placement on 29 May helps build a war chest to meet unexpected external uncertainties.
Nomura noted the complexity of the proposed merger, spanning multiple geographies, means that it should take some time to receive all necessary approvals. Hence, a stronger war chest should help lower the funding risk for the merger in case of unfavorable financial markets between now and at the time of the merger completion.
Nomura lowered its FY2020 EPS estimate by 9% to reflect the 6% dilution from the share
placement and 50ppt lower GPM owing to a weak 1Q.
全新節目《說說心理話》青少年不可以戀愛！？真實個案講述驚心動魄經歷► 即睇
