Nomura lowered its target price for Geely Automobile (00175) to HK$15.9 from HK$16.2 and maintained its "buy" rating.
The research house said Geely's net profit of CNY4bn in 1H was in line with its profit alert. Nomura trimmed its FY2019-21 EPS estimates by 2% each to reflect the higher R&D expense guidance, but partly offset by a 4% rise in ASP on an improved product mix, while keeping the sales volume unchanged.
It believes pro-active dealer inventory destocking in 1H for its older models should put Geely in a stronger position to capitalise on volume recovery from 4Q when the industry peak season starts. Nomura expects the potential inventory re-stocking of newer and higher-priced models in coming months to help Geely's wholesale volumes and hence profit.
22/08/2019 15:05
{I-bank focus}Nomura lowers Geely Auto (00175) to HK$15.9
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