Bank of America Securities slightly raises Geely's target price to 25 yuan and upgrades sales and revenue forecasts

Bank of America Securities research report indicates that Geely Auto (00175.HK) reported a 27% year-on-year increase in revenue for the third quarter, reaching RMB 89.2 billion, primarily driven by a 43% year-on-year increase in delivery volume and an increase in average selling price. Benefiting from improved economies of scale, enhanced operational efficiency, and optimized product mix, the gross profit margin rose by 1.2 percentage points year-on-year to 16.6%.

Net profit for the period increased by 59% year-on-year to RMB 3.8 billion, with cumulative net profit for the first three quarters reaching RMB 13.1 billion, accounting for 77% of the bank's full-year forecast. After accounting for foreign exchange losses and special items, the group's adjusted profit for the third quarter was RMB 4 billion, a quarter-on-quarter increase of 25%; estimated net profit per vehicle was RMB 5,200, representing year-on-year and quarter-on-quarter increases of 27% and 17%, respectively.

The bank has raised its sales forecasts for 2025 to 2027 by 2%, 1%, and 2%, respectively, total revenue forecasts by 1%, 2%, and 2%, and earnings per share forecasts by 1%, 6%, and 5%. The target price has been raised from HKD 24 to HKD 25, reiterating a "Buy" rating