Geely Automobile (175.HK) 15 November 2017 The roar of Lynk Geely (175.HK) Lift TP to HKD35: The long awaited Lynk is to be launched at Guangzhou Auto Automobile Sector Show on 17 November. With its competitive price positioning and world-class Rating Buy tech. spec, Lynk will lead Geely into golden years from 2018E onwards. We Target Price HK$35 expect its FY17F net profit to jump 46% yoy, driven by robust sales volume Close Price HK$28.2 growth (Fig. 1) and profit margin expansion. 52 weeks range HK$7.02-28.40 Market cap HK$249b Satisfying results so far: 10M17 sales increased 72% yoy to 952k units, Source: Bloomberg, CASH achieving 87% of the 1.1m unit annual sales target. The monthly sales volume in Oct was 125k units, up 30% yoy and 15% mom. The market share gain is CASH Research
[email protected] evidenced by the 72% accumulated sales growth (v. China overall auto 15 November 2017 market’s muted 2.1% sales growth in 10M17.) All the four new models Cynthia Tam Research Analyst launched in 2016 maintained high levels of sales volumes. In particular, the Tel: (+852) 2287-8466
[email protected] sales volume of Boyue amounted to 30.1k units, being the best- selling model of the Group. While the sales of Emgrand GL/ Emgrand GS/ Vision SUV amounted to 11.6k/13.5k/16.1k units, achieving 91.7%/60.2%/3.2% growth. Lynk- winner takes all: Lynk & Co brand can supplement the Group’s current market coverage.