Citigroup: Gives Geely Auto a "buy" rating and raises target price to HK$23

Citi released a research report stating that they have reassigned a "buy" rating to GEELY AUTO (00175) with a target price of HK$23. GEELY AUTO's sales in the fourth quarter of 2024 exceeded the annual target. Citi predicts that the core profit in the fourth quarter will reach RMB 3.81 billion, compared to the adjusted core net profit of RMB 2.6 billion in the same quarter of last year. The total forecasted core net profit for the fiscal year 2024 is RMB 8.44 billion. Looking ahead, the bank currently predicts that the total sales of GEELY AUTO, Xpeng (ZK.US), Lynk & Co, and Volvo, along with other brands, for the next two years will be 2.72 million and 2.94 million respectively. The proportion of new energy vehicles in the sales will increase from 41% in 2024 to 63% and 70%, while the group's average selling price will increase by 4.3% and 2.2% year-on-year. Based on the latest sales forecast, Citi predicts profits of RMB 13.01 billion and RMB 15.8 billion for Geely in the next two years.