Rerating Is a Catalyst to Share Price, Maintain "Accumulate" 重新评级为股价催化剂，维持“收集”

股票研 [Table_Title] Company Report: Geely Automobile (00175 HK) Toliver Ma 马守彰究 (852) 2509 5317 Equity Research 公司报告：吉利汽车 (00175 HK) [email protected] 9 July 2020 [Table_Summary] Rerating Is a Catalyst to Share Price, Maintain "Accumulate" 重新评级为股价催化剂，维持“收集” Geely Auto’s sales in June continued to show strong momentum. Sales [Table_Rank] 公 was up 21.2% yoy to 110,129 units. Sales in June rode the recovering trend Rating: Accumulate of the auto market, partly due to 1) pent-up demand, 2) supportive Maintained 司 government policies, and 3) low base comparison. SUV sales was very 报 strong in 2Q20, and the Company’s competitive SUV products have been 评级：收集 (维持) very supportive, particularly the Boyue, Emgrand GS, Vision X6 and Binyue. 告 Meanwhile, benefiting from the Lynk 05 and Lynk 03, Lynk & Co. showed [Table_Price] strong performance, up 52.7% yoy. 6-18m TP 目标价: HK$20.00 Company Report Revised from 原目标价: HK$14.60 Sales to maintain growth at a relatively good pace. Most new models were launched in 1H20, with only the CMA-based sedan, Preface (code Share price 股价: HK$17.000 FS11), to be expected to launch in 3Q20. In June, the Haoyue and Lynk 05 had already started selling and we believe that the ramp-up period will be stronger in 2H20. Stock performance Market rerating continues. Rerating was mainly pushed by two factors. 1) 股价表现 Positive sentiment on the recovering industry. Decent growth was generally 50.0 % of return maintained in 2Q20, particularly as the Company outperformed the market. 2) 40.0 The proposal of the listing on the Sci-Tech Board. The Company's stock price 30.0 reacted positively to the announcement. 证 20.0 The Company’s has been generating a 1-month relative return of 32.5%. The 券告 10.0 Company is also trading at a very high valuation of 12-month forward PER of 16.5x. Nonetheless, based on the current market sentiment and the 0.0 研报 Company’s positive outlook, we believe that it can sustain the current (10.0) 究究 valuation. We have increased our TP to HK$20.00 due to the rerating of (20.0) the Company, and maintained investment rating as "Accumulate". Our 报 (30.0) 研 TP represents 16.5x 2021 PER and 14.3x 2022 PER. Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 告吉利汽车 6 月份的销售继续显示强劲势头。销量同比增长 21.2%至 110,129 辆。6 月份的 HSI Index GEELY AUTOMOBILE 券 Equity Research Report 销售与汽车市场的复苏趋势一致，部分原因是：1）需求被抑制；2）政府支持政策和 3）证低基数。SUV 销售在 2020 年第 2 季度非常强劲，公司具有竞争力的 SUV 产品给予了极大的支持，特别是博越、帝豪，远景和缤越。同时，受益于领克和领克， [Table_PriceChange] [Tab GS X6 05 03 Change in Share Price 1 M 3 M 1 Y 领克品牌表现强劲，同比增长 52.7%。股价变动个月个月年 1 3 1 le_I Abs. % 36.9 47.8 45.3 汽销售增长将保持相对良好态势。大多数新车型已经在 2020 年上半年推出，只有基于 CMA 绝对变动 % 车nfo1 的轿车 Preface（代码 FS11）预计在 2020 年第 3 季度推出。在 6 月，豪越和领克 05 已 Rel. % to HS Index 相对恒指变动 32.2 39.9 52.0 经开始销售，我们相信 2020 年下半年会爬坡更快。 % 及 Avg. Share price(HK$) ] 13.2 12.3 12.9 平均股价（港元）市场重估持续。重估主要受两个因素推动：1）对行业复苏的积极情绪。2020 年第 2 季度零 Source: Bloomberg, Guotai Junan International. 行业销售的增长较好，特别是公司的表现好于市场。）在科创板上市的计划。自宣布以部 2 来，公司股价反应积极。件公司的个月相对回报率为。公司的个月预测市盈率为倍，估值非常高。行 1 32.5% 12 16.5 尽管如此，基于当前的市场情绪和公司的乐观前景，我们认为它可以维持目前的估值。由业于公司重新评级，我们将目标价上调至 20.00 港元，维持投资评级为“收集”。我们的目标价相当于 16.5 倍 2021 年市盈率和 14.3 倍 2022 年市盈率。 Automobiles & Components Sector Automobiles & Components Y[Table_ear End Turnover Net Profit EPS EPS PER BPS PBR DPS Yield ROE [Tab 年结Profit ] 收入股东净利每股净利每股净利变动市盈率每股净资产市净率每股股息股息率净资产收益率 le_I 12/31 (RMB m) (RMB m) (RMB) (△ %) (x) (RMB) (x) (RMB) (%) (%) 2018A 106,595 12,553 1.398 17.5 10.7 5.004 3.0 0.350 2.3 31.6 nfo2 2019A 97,401 8,190 0.902 (35.5) 16.8 5.938 2.6 0.250 1.6 16.5 中] 2020F 93,478 8,880 0.942 4.4 16.4 7.474 2.1 0.319 2.1 14.6 2021F 115,376 11,091 1.106 17.4 14.0 8.461 1.8 0.402 2.6 15.5 吉外 2022F 122,376 12,729 1.269 14.7 12.2 9.569 1.6 0.466 3.0 15.7 利运汽 [Table_BaseData]Shares in issue (m) 总股数 (m) 9,812.7 Major shareholder 大股东 Geely Holding 42.7% 输 Market cap. (HK$ m) 市值 (HK$ m) 166,815.9 Free float (%) 自由流通比率 (%) 57.3 车 3 month average vol. 3 个月平均成交股数 (‘000) 79,873.9 FY20 Net gearing (%) FY20 净负债/股东资金 (%) Net cash 52 Weeks high/low (HK$) 52 周高/低 (HK$) 18.900 / 10.000 FY20 Est. NAV (HK$) FY20 每股估值（港元） 21.3 Source: the Company, Guotai Junan International. Geely Automobile (00175Geely HK) Automobile See the last page for disclaimer Page 1 of 7 [Table_PageHeader]Geely Automobile (00175 HK) SALES AND OUTLOOK ] 1 r a M t h g i R _ e l b a T [ Strong sales continued in June. Geely Auto’s sales momentum continued in June, recording sales of 110,129 units, up by 21.2% yoy. Sales in June rode the recovering trend of the auto market, partly due to 1) pent-up demand, 2) supportive government policies, and 3) low base comparison. While we expect growth to extend to 3Q20, it should be at a slower pace, particularly in Aug. and Sep. as the positive effect will diminish. In 1H20, Geely Auto only completed 38% and 40.0% of full-year sales volume estimate of the management’s guidance and our forecast, respectively. We expect that we could be a bit too optimistic on sales volume. However, with pent-up demand continuing, we expect seasonal sales trend could be different from 9 July 2020 the historical reference. Therefore, we maintain our sales forecast intact. SUV support sales. Thanks to strong demand for SUVs in the market, strong SUV products will help Geely Auto’s recovery. SUV sales was particularly strong this year, up by 20.1% in May 2020, with sales mix on par with sedans; the first time in its history. Geely Auto’s product strategy is also skewed towards SUVs. In 2020, only one all new sedan (FS11) will be launched, and the rest are all SUVs (See table-1 for new model pipeline). A similar pattern was also noticed in previous years. For this reason, Lynk & Co. also performed well in 1H20, only dropping 2.0% yoy, which is well above the market. Currently, Lynk & Co. has got five model offerings (the 01, 02, 03, 05, and 06), with the 05 and 06 being the latest additions this year. Only Lynk 03 is a sedan, and the rest are different variations of SUV. Sales mix of Lynk & Co is increasing, up to 10.3% in 1H20 as compared to 9.4% in 2019. We believe that Lynk & Co. has been on a rather good track of growth, especially that most of this growth comes ] 2 r a M t h g i R _ e l b a T [ from its sedan Lynk 03, a rare source of growth for many self-owned brands. Demand for its sporty version, the 03+, is highly sought after, and we believe the ability to craft sport cars adds a premium to the brand. Performance has been stronger than its close competitor, WEY, which has been very weak for over a year. Figure-1: Geely Auto’s Sales and Growth Figure-2: Geely Auto’s Sales Mix by Vehicle Type 2018 Units 2019 Sedan MPV SUV 2020 180,000 60% 100.0% 2019 growth 160,000 2020 growth 40% 90.0% 80.0% (00175 HK) 140,000 20% 56.9% 120,000 70.0% 58.0% 61.1% 0% 60.0% 100,000 -20% 50.0% 80,000 吉利汽车 -40% 40.0% 60,000 30.0% -60% 40,000 20.0% 20,000 -80% 10.0% 0 -100% 0.0% 2018 2019 1H20 Jul Apr Oct Jan Jun Geely Automobile Mar Feb Nov Dec Aug Sep May Source: the Company, Guotai Junan International. Source: the Company, Guotai Junan International. Figure-3: Geely Auto’s Sales Mix by Brand Figure-4: YTD Sales Growth by Brand Geely Lynk & Co Geely Lynk & Co Geometry 0.0% 100% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 8.0% 9.4% 10.3% -5.0% 90% -10.0% 80% -15.0% 70% 60% -20.0% 50% -25.0% 92.0% 89.7% 89.5% 40% -30.0% 30% -35.0% 20% -40.0% 10% -45.0% 0% Report 2018 2019 1H20 -50.0% Source: the Company, Guotai Junan International. Source: the Company, Autohome, Guotai Junan International. Note: We excluded Geometry due to its limited sales contribution. Company See the last page for disclaimer Page 2 of 7 [Table_PageHeader]Geely Automobile (00175 HK) Sales expected to maintain relatively good pace. As discussed, we believe that the Company’s SUV profile is competitive enough to support its growth, and is expected to extend to 2H20. Moreover, most new models] 1 r havea M alreadyt h g i beenR _ launchede l b ina T [ 1H20, with only the CMA-based sedan, Preface (code FS11), expected to be launched in 3Q20. In Jun., the Haoyue and Lynk 05 already went on sale, and we believe that the ramp-up period will be stronger in 2H20.

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