Geely (SEHK:175) Valuation After Opening the World’s Largest Auto Safety Testing Facility

Geely Automobile Holdings (SEHK:175) just opened its Geely Safety Centre, billed as the world’s largest auto safety testing facility, a strategic move that aligns closely with its intelligent vehicle and safety focused ambitions.

See our latest analysis for Geely Automobile Holdings.

That focus on safety is arriving as momentum cools a little, with the latest share price at HK$17.77 and a strong year to date share price return, but a softer 1 year total shareholder return signalling some profit taking after earlier gains.

If Geely’s move has you rethinking the whole auto space, this could be a good moment to explore other auto manufacturers that might benefit from similar long term shifts in demand.

With the shares still trading well below analyst targets and our estimate of intrinsic value, while already up strongly this year, the key question now is whether Geely is still mispriced or if the market is already baking in future growth.

Most Popular Narrative Narrative: 32.6% Undervalued

With Geely closing at HK$17.77 and the most followed narrative pointing to fair value near HK$26, the gap reflects ambitious growth and margin expectations.

The analysts have a consensus price target of HK$26.275 for Geely Automobile Holdings based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of HK$42.17, and the most bearish reporting a price target of just HK$20.07.

Read the complete narrative.

Curious how steady double digit growth, evolving margins and a higher future earnings multiple can still justify a sizable upside from today. The blueprint is in the projections, not the headlines.

Result: Fair Value of $26.38 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, fierce NEV competition and execution risk around merging Zeekr and Lynk and Co could squeeze margins and derail the upbeat growth narrative.

Find out about the key risks to this Geely Automobile Holdings narrative.

Build Your Own Geely Automobile Holdings Narrative

If you would rather dig into the numbers yourself and come to your own conclusions, you can build a tailored view in just minutes: Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Geely Automobile Holdings.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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