[ET Net News Agency, 21 August 2020] HSBC Qianhai Securities cut its target price for
Geely Automobile (00175) to HK$19.7 from HK$21.2 and maintained its "buy" rating.
The research house said Geely's 1H earnings were below expectations on lower cost
reduction, higher depreciation and amortization, and higher SG&A expenses.
Geely announced on 17 August that it may launch five new models in 2021 and four new
models in 2022. The EV dedicated platform, PMA, could drive strong EV product strength
such as improved mileage, better consumer experience, and a higher level of autonomy.
HSBC remains constructive on margin expansion as it expects increasing volume mix from
new platforms (i.e. CMA/BMA) to drive product mix upgrades and better economies of scale.
(KL)