Geely (175.HK): Slower growth ratio but better structure October 26, 2018

Investment Summary

Mainly affected by the weakness of car market and the increase of base, Geely`s sales growth rate in September was narrower than previous, but the proportion of new vehicles with higher prices increased significantly. With the forecast that competition in the industry will intensify, we believe the sales growth of Geely will continue to slow down in the fourth quarter of 2018. But as the sales of new models ramp up and the proportion of old models continues to decrease, the marketing of the company will be restructured and move towards the higher end, partly offsetting the negative impact of the price pressure, and maintaining a steady growth in its gross margin and ASP. As the new products and capacity release progress steadily and the company`s medium- and long-term growth is promising. So we maintain the rating of Buy.

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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