Daiwa has revised its investment rating on Geely Auto (HKG: 00175) from "Hold" to "Buy," concurrently increasing its target price from HK$23.7 to HK$27, representing an upward adjustment of 13.9%.
The firm's analysis points to the robust sales momentum of Geely's premium brand, Zeekr, as a key driver for the overall brand's upmarket transition. This, combined with ongoing overseas market expansion and synergistic benefits from the group's "One Geely" strategy, is anticipated to fuel sustained profit growth for the company.
Daiwa highlighted Geely's strong sales performance in the first five months of this year and projected that international markets will serve as the primary growth engine from 2026 to 2030. Zeekr's contribution to the group's total sales has risen to 12%, and its order structure indicates consumer acceptance of the premiumization strategy, which is expected to further enhance the overall brand image.
Regarding financial forecasts, Daiwa has raised its Geely sales volume estimates for 2026 to 2028 by 1% to 2%, reflecting the overseas expansion plans and strong order momentum for the Zeekr 9X model. Concurrently, the average selling price forecast for the same period has been increased by 5% to 6%, with the gross margin forecast lifted by 0.3 percentage points, in line with the brand's upmarket trend.
Overall, Daiwa has adjusted its revenue forecast for Geely for 2026 to 2028 upward by 6% to 8%, while its net profit forecast has been raised by a more significant 12% to 16%.
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