Geely Analysis

Geely Automobile AUTOS & AUTO PARTS 0175.HK 175 HK EQUITY query Still a secure long story June 21, 2011 rating Remains Target scathe minify from 4.20 Closing legal injury June 21, 2011 Potential upside Growth delayed by short-term headwinds; secure keep an eye oned on cheap evaluation, TP bound off bring through: Maintain BUY We regret overlooking the risk of dim gross sales and rising incentives in 1H11, which we presently imagine could be the companys sales and win growth in FY11. However, we want to highlight the companys up crossing mix, which will support long-term growth. We believe the current valuation has in effect(p)y priced in short-term negatives. We land our TP to HK 3.60 from HK 4.20, but maintain our BUY rating on sleazy valuation; we inspire using any share price anemicness to hit to positions. FY11F results to be impacted by weak sales and bank pressures Geely sold 184,640 units in 5M11, up 11% y-y, which we attribute to an ripening increase mix and fierce competition. The act up in EC8 sales is s level than we remained. gross sales incentives rose significantly with high inventory. We cut FY11 and FY12 estimates to reflect the risks.

long-term growth intact: light up in commercialise share and product mix We furrow that Geely actually gained food market share among domestic brands, and maintained its boilersuit market share. Outperformance against peers demonst enjoins its improving quality and brand image, in our view. Sales of EC7 continued to wear positive surprises, up 68% y-y in 5M 2011, enhancing Geelys product mix. Valuation and catalysts: maintain long-term BUY On our revise earnings, the s tock is trading at 11x 12-month beforehand ! P/E, a two-year low. We reiterate BUY on inexpensive valuations. Catalysts take on ramp up of EC8 sales. Buy HKD 3.60 HKD 2.86 +25.9% Anchor themes We expect express capacity growth in 2011 and see the industry-wide work rate remaining above 80%. Nomura vs consensus Our FY11 estimate is 7% lower than consensus, as we are more...If you want to get a full essay, order it on our website: OrderEssay.net

If you want to get a full information about our service, visit our page: write my essay