[ET Net News Agency, 21 September 2020] HSBC Qianhai Securities lifted its target price
for Geely Automobile Holdings (00175) to HK$20.4 from HK$19.7 and maintained its "buy"
rating.
The research house believes new energy vehicles (NEVs) - passenger and commercial - will
remain a critical part of the Chinese government's policy agenda to reduce emissions,
enhance national energy security, and prioritise domestic production.
HSBC revised its growth forecast for China NEV sales volume (passenger + commercial) for
2020 and 2021 to -5% and +35%, from +12% and +30%, to reflect (1) COVID-19 disruption to
EV model launches in 2020; (2) lower bulk fleet purchase volumes due to lower subsidies in
2020, and (3) increasing quality EV supply from 2021.
It believes PMA, the company's new dedicated EV platform, scheduled to be fully
operational in 2021, will make its EV models more competitive and strengthen its product
cycle. Alliances with major battery makers should help to secure battery supply, and its
sister company Volvo's alliance with Waymo can boost Geely's ability to raise the level of
driving autonomy for EV models. (KL)