Geely (175 HK) Back to the Track December 31, 2020 469

PSR Recommendation: BUY Status: Upgraded
Target Price: HKDHKD31

Investment Summary
Sales Volume in November Continues to Grow, up by 5% yoy In November, Geely Auto reported a sales volume of 150,517 units in the wholesale market, up 5% yoy and up 7% mom, continuing the trend of recovery since April. In terms of markets, the overseas sales volume was 11,769 units, a sharp increase of 271% yoy; the domestic sales volume was 138,748 units, basically the same on a year-on-year basis, with a slight decrease of 0.9%. Meanwhile, Geely Auto’s total sales volume in the first 11 months of 2020 reached 1,166,015 units, down by 5% yoy. The decrease continued to narrow from last month’s -7%. The Company has already completed 88% of its annual target of 1.32 million units. In view of the peak season at the end of the year and the sales promotion of the car companies, the Company is expected to be quite certain to achieve the annual target. Main Models Display Steady Performance In terms of specific models: 1) The total sales volume of Emgrand and BoYue was close to 50,000 units, displaying steady performance. Specifically, Geely Auto sold 23,407 units of the Emgrand and 26,136 units of the Bo Yue. The sales volume of the both exceeded 20,000 units for four consecutive months, ranking the first echelon in the market segment. 2) Binyue continued its strong momentum, with more than 10,000 units sold for six consecutive months and 15,556 units contributed in November. 3) The Lynk & Co brand sold a total of 22,798 units in November, a sharp increase of approximately 61% yoy and an increase of approximately 4% mom. In the first 11 months of 2020, Lynk & Co’s cumulative sales volume reached 150,603 units, up by 28.4% yoy. The increase was mainly contributed by the Lynk & Co 03 and the new models 05 and 06. Specifically, the sales volume of the Lynk & Co 03 exceeded 7,000 units for three consecutive months. We think this shows that the Company’s high-end sub-brand strategy initially achieved success, and the rising trend of Lynk & Co is further highlighted.

About the author

Profile photo of Zhang Jing

Zhang Jing
Phillip Securities (HK)

Bachelor Degree in Tongji University of Engineering; Master Degree in East China Normal University of finance. Currently covering the automobile and air sectors. She has years of experience in investment research and is good at combining analysis for the companies with industry prospects.

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