Citigroup raised the target price of Geely Auto to HK$41, saying investors need to be patient.
Text | Tang Jieya
Edit | Shang Wenduo
On November 2, Citibank raised the target price of Geely Auto (00175.HK) to 41 Hong Kong dollars (original value 30 Hong Kong dollars), and maintained the best recommendation rating . On the 3rd, Geely Auto’s share price was HK$19.08, a single-day increase of 5.53%.
Citibank analysts believe that Geely’s prospects are more constructive and investors need to wait patiently. The report shows that the upcoming new product cycle, the merger of Volvo and Geely, and the new PMA platform dedicated to electric vehicles are the main reasons for raising the target price.
Citibank said that Geely will launch five new models from November 20 to May 21. The new model cycle will boost the stock price and increase sales revenue. Analysts have raised their sales revenue forecast for 21-23, increasing the total sales of Geely and Lynk & Co in 2021 to 1.6 million units, a year-on-year increase of 23%.
The potential merger of Volvo and Geely is also the driving force for the stock price rise. While reducing costs, Geely’s net profit will be greatly increased, which is expected to reach 1.7 billion yuan in 2021. The same is true means that Volvo assets will be included in Hong Kong stocks, which will help Geely maintain a stable share price in the capital market and boost confidence in the secondary market.
The merger of the two companies can also help the internationalization of the Lynk & Co brand. The new listed company may own 100% of Lynk & Co. Lynk & Co in the next 3 years The net profit is forecast to increase year by year, with forecasts of 6.7, 12.3 and 1.61 billion yuan respectively.