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On Thursday, Geely Automotive Holdings Ltd. (175:HK) (OTC: GELYF (OTC:GELYF)) received a positive outlook from Jefferies, as the firm’s analysts increased the price target on the company’s shares to HK$21.80, up from the previous target of HK$20.00. The Buy rating on the stock was reaffirmed, signaling continued confidence in Geely’s prospects. The market appears to share this optimism, with InvestingPro data showing an impressive 94% return over the past year and a strong 43% gain in the last six months.
The adjustment in Geely’s price target follows a series of engagements with the company by Jefferies analysts, including participation in Geely’s post-results Non-Deal Roadshow (NDR) and a visit to the automaker’s headquarters in Hangzhou. These interactions provided the analysts with a closer look at the company’s operations and strategic direction. The company’s solid financial foundation is evident in its balance sheet, with InvestingPro analysis showing more cash than debt and an attractive P/E ratio of 9.75.
Jefferies’ analysis indicates that Geely’s earlier investments in modular car manufacturing, advancements in smart driving technology, and efforts to expand its global footprint are beginning to yield results. The firm acknowledges that Geely faced some initial challenges, but now appears to be on a trajectory for significant growth.
The year 2025 is highlighted as a potential turning point for Geely, as the company’s early initiatives are expected to mature and contribute more substantially to its performance. The raised price target reflects Jefferies’ belief in the automaker’s capacity to capitalize on these initiatives.
In their commentary, Jefferies analysts stated, "We joined Geely’s post-result NDR, followed by a company visit to its Hangzhou headquarter. In our view, after going through some initial hiccups, the company’s early initiatives in modular car manufacturing, smart driving development and globalization look to be paying off, with 2025 being the inflection point. Maintain Buy with PT raised to HKD21.8." This statement underpins the firm’s rationale for the upgraded price target and the sustained Buy rating.
In other recent news, Geely Automotive Holdings Ltd. has been the subject of notable developments. Jefferies has reiterated a Buy rating for Geely with a price target of HK$20.00, following insights from the company’s AI Day event in Hainan. Geely introduced the "Qianli Haohan" smart driving system, which will be available across its range of models, emphasizing accessibility to advanced driving technology. The company also announced plans to mass-produce a Level 3 autonomous driving system, known as H9, utilizing dual ThorU chips and a multi-LiDAR redundant architecture.
In a bid to enhance market competitiveness, Geely has reduced prices for some Galaxy models by RMB 3,000 to RMB 6,000 and introduced new models like the E8 and Xingyao 8. These strategic moves reflect Geely’s commitment to innovation and responsiveness to market conditions. The reaffirmed Buy rating from Jefferies indicates confidence in Geely’s growth potential.
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