Key Takeaways
Geely Automobile Holdings (00175.HK) shares fell 4.26 percent on Wednesday after Daiwa Capital Markets downgraded the stock by two notches, citing a lack of near-term sales growth momentum.
Daiwa lowered its rating on the automaker to ‘Hold’ from ‘Buy’ and trimmed its price target to HKD23.7 from HKD24.5, according to a research report released May 13.
The stock dropped to a session low of HKD21.02 before closing at HKD21.6 in Hong Kong. Turnover in the shares was heavy, reaching HKD974 million. The new price target implies a 9.7 percent upside from the closing price.
The downgrade introduces a cautious note for an automaker that recently reported a 31 percent year-over-year increase in adjusted net profit for the first quarter. Geely's next catalyst will be its ability to translate its rapid new energy vehicle expansion into sustained sales growth.
Daiwa's report noted that while Geely’s first-quarter revenue rose 15 percent to RMB83.8 billion, its unadjusted net profit fell 27 percent to RMB4.2 billion, partly due to foreign exchange losses. The firm’s gross margin improved 1.8 percentage points to 17.5 percent, helped by a higher contribution from exports and sales from its premium Zeekr brand.
The cautious analyst view contrasts with the company’s own recently published ESG report, where it announced it had surpassed its 2025 carbon reduction targets. Geely also reported that its new energy vehicle (NEV) sales surged 90 percent year-over-year in 2025 to 1.688 million units, positioning it as a leader among Chinese automakers.
The downgrade puts the stock at its lowest level in two weeks, testing support for a name that has been a beneficiary of the growing EV market. Investors will watch upcoming monthly sales data for signs of the sales momentum Daiwa questioned.
This article is for informational purposes only and does not constitute investment advice.
