Morgan Stanley: Maintains GEELY AUTO (00175) "Overweight" rating, target price HK$27
Despite pressure on exports and high-end sales in the second half of the year, Geely's scale, cost leadership, and self-funded/free cash flow (FCF) financial position should enable it to further strengthen its competitive position during an industry downturn, making Geely a relatively lower-risk, higher-quality investment position among Chinese auto stocks within the bank's coverage.
Morgan Stanley released a research report stating that recent weekly auto data also shows downside risks to industry sales in September, mainly due to the October 1 holiday. The bank gives GEELY AUTO (00175) a target price of HK$27 and an "Overweight" rating.
The bank mentioned that investors may be waiting for clearer news regarding potential EU tariffs on plug-in hybrid electric vehicles (PHEVs) and cuts to export VAT rebates before increasing exposure. However, at approximately 6x valuation under the bank's base-case scenario, Geely's valuation appears increasingly attractive. Geely's scale, cost leadership, and self-funded/free cash flow (FCF) financial position should enable it to further strengthen its competitive position during an industry downturn, making Geely a relatively lower-risk, higher-quality China auto stock investment position within the bank's coverage.
Related Articles
SEC issues "no-action framework letter": retail investors authorize once, default to following board voting, Tesla, Inc. (TSLA.US) first to obtain the template.
Xiamen Tungsten (600549.SH): Jinlong Rare Earth's application for public issuance of shares and listing on the Beijing Stock Exchange has been accepted.
Roche (RHHBY.US) BTK inhibitor submitted for marketing approval
SEC issues "no-action framework letter": retail investors authorize once, default to following board voting, Tesla, Inc. (TSLA.US) first to obtain the template.
Xiamen Tungsten (600549.SH): Jinlong Rare Earth's application for public issuance of shares and listing on the Beijing Stock Exchange has been accepted.
Roche (RHHBY.US) BTK inhibitor submitted for marketing approval
