Company Coverage
Geely Auto (175 HK): 2Q26: Earnings Beat On ASP and Margins; Raise Target Price To HK$29.00
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
HK$18.67
HK$29.00
+55.3%
HK$27.00
Analyst
Highlights
2Q26 adjusted net profit of Rmb5.12b (+61% yoy) beat consensus estimates by 4%, driven by ASP and margin expansion.
Gross margin expanded 1.6ppt to 17.9% in 1H26, with overseas margins commanding a 10ppt premium over domestic.
We raise our 2026-28 net profit forecasts by 5%/7%/9% to Rmb19.89b/Rmb27.265b/Rmb35.09b on higher ASP and margins.
Maintain BUY and raise target price to HK$29.00 target (10x 2026F PE).
Analysis
2Q26 results beat expectations on margins. Geely Auto’s (Geely) 2Q26 results beat expectations with reported net profit of Rmb4,925m (+36.2% yoy/+18.2% qoq) and adjusted net profit (excluding forex gain/(loss) and other exceptional items) of Rmb5,123m (+60.7% yoy/+12.3% qoq), vs our estimate of Rmb4,995m and consensus estimate of Rmb4,912m. This brings 1H26 reported net profit and adjusted net profit to Rmb9,091m (-1.8% yoy) and Rmb9,684m (+46.2% yoy) respectively. These represent 48%/50% of our full-year 2026 net profit and adjusted net profit estimates of Rmb9,091m/Rmb9,684m respectively. The earnings beat stemmed from ASPs and margins, given premiumisation and overseas sales.
Highlights
2Q26 adjusted net profit of Rmb5.12b (+61% yoy) beat consensus estimates by 4%, driven by ASP and margin expansion.
Gross margin expanded 1.6ppt to 17.9% in 1H26, with overseas margins commanding a 10ppt premium over domestic.
We raise our 2026-28 net profit forecasts by 5%/7%/9% to Rmb19.89b/Rmb27.265b/Rmb35.09b on higher ASP and margins.
Maintain BUY and raise target price to HK$29.00 target (10x 2026F PE).
Analysis
2Q26 results beat expectations on margins. Geely Auto’s (Geely) 2Q26 results beat expectations with reported net profit of Rmb4,925m (+36.2% yoy/+18.2% qoq) and adjusted net profit (excluding forex gain/(loss) and other exceptional items) of Rmb5,123m (+60.7% yoy/+12.3% qoq), vs our estimate of Rmb4,995m and consensus estimate of Rmb4,912m. This brings 1H26 reported net profit and adjusted net profit to Rmb9,091m (-1.8% yoy) and Rmb9,684m (+46.2% yoy) respectively. These represent 48%/50% of our full-year 2026 net profit and adjusted net profit estimates of Rmb9,091m/Rmb9,684m respectively. The earnings beat stemmed from ASPs and margins, given premiumisation and overseas sales.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
HK$18.67
HK$29.00
+55.3%
HK$27.00
Analyst
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