Date of Report
Thursday, 03 October 2024

Broker Name
UOB Kay Hian

Earnings Growth on the Rise
Geely is poised to experience a significant earnings escalation, driven by its robust product line-up and strong export growth. The company has launched new electric vehicle (EV) models that have received substantial order flows, indicating a strong market reception and a positive outlook for the company’s future performance.

New EV Models Gaining Traction
Geely’s newly launched EV models, including the Galaxy E5, Xingyuan, and Zeekr 7X, are performing exceptionally well in the market. These models have secured strong order flows, demonstrating the company’s competitive edge in the rapidly growing EV sector.

Upcoming Product Launches
Looking ahead, Geely plans to introduce additional mass-market EV models, particularly in the plug-in hybrid electric vehicle (PHEV) segment. This strategy is aimed at capturing a larger market share, especially from established incumbents in the automotive industry. The focus on PHEVs aligns with the growing demand for cleaner, more efficient vehicles.

Valuation and Target Price
UOB Kay Hian has raised Geely’s target price from HK$13.00 to HK$21.50. This increase reflects the company’s strong growth potential and lower market discount rate. The revised target price is based on a higher price-to-earnings (PE) multiple for 2025F, which has been adjusted from 12x (the one-year historic mean) to 20x (the three-year historic mean), reflecting increased confidence in the company’s earnings trajectory.

Catalysts for Share Price Growth
Key events that could drive Geely’s share price higher include strong monthly sales figures and the release of 3Q24 results. The company’s solid performance and continued market expansion are expected to sustain its upward momentum in the near term.

Timeline for Growth
Investors can look forward to significant developments in Geely’s performance, particularly in the October to November 2024 period, when the company is expected to report strong monthly sales and 3Q24 results. These reports are anticipated to further solidify Geely’s position as a leading player in the EV market.

Investment Outlook
Geely’s investment potential remains strong due to its expanding EV product portfolio, aggressive market penetration, and solid export growth. With a clear strategy for continued growth and a favorable market environment, Geely is well-positioned for long-term success, making it an attractive investment opportunity for investors seeking exposure to the booming EV sector.