Geely: Maintain "Strong Buy" Rating With Good 1H25 Performance

Geely Auto maintains a "Strong Buy" rating following robust 1H2025 performance that exceeded expectations in operating efficiency and growth, prompting management to raise the 2025 unit sales target to 3 million from 2.7 million. While the Geely brand continues to drive performance, Zeekr has underperformed, though not due to fundamental product weakness. The H-share price target was conservatively adjusted to HKD24, down from HKD30, yet the stock is still seen as having substantial upside due to its attractive valuation relative to competitors.

Analysis

Geely Automobile Holdings (GELYF) receives a continued "Strong Buy" rating, supported by a robust first-half 2025 performance that exceeded expectations in both operating efficiency and growth, even amidst broader industry headwinds. This operational strength prompted management to significantly raise its 2025 unit sales target to 3 million from 2.7 million, signaling strong forward-looking confidence. While the core Geely brand is the primary driver of this outperformance, the analysis notes that the Zeekr brand is faltering, though specifies this is not due to fundamental product weakness. Concurrently, the analyst has conservatively adjusted the H-share price target down to HKD24 from HKD30. Despite this reduction, the core investment thesis remains intact, as the company's valuation is viewed as lagging its competitors, suggesting substantial upside potential.

Key Decisions for Investors

• Given the upgraded sales guidance and attractive valuation relative to peers, investors could view the stock as a compelling long opportunity, aligning with the analyst's 'Strong Buy' thesis.
• Investors should closely monitor the performance of the Zeekr brand, as a turnaround could act as a significant catalyst, while continued underperformance remains a key risk to consolidated results.
• The price target reduction to HKD24 should be interpreted as a conservative adjustment rather than a negative signal, with the valuation gap to competitors still indicating significant potential for capital appreciation.