Geely - was yesterday's 6% sell-off overdone?

Macquarie Warrants Singapore
06-23 09:50

🚨Yesterday, $GEELY AUTO(00175)$ closed 6.1% lower to HKD 17.45 to finish as the Hang Seng Index's worst performer

While there was no specific news on the company, Bloomberg believes that the Geely sell-off may have been part of portfolio managers' rotation out of non-AI names such as Geely and into AI-linked names in Korea, Japan and Taiwan

📢Last week on 13 June, Geely announced plans to shut down or merge redundant entities and concentrate resources around the HK-listed arm. While framed positively, the announcement may have raised near-term execution uncertainty (Bloomberg)

🚙During Geely's investor day on 9 June, the company demonstrated the improving autonomous driving capabilities in their EVs, introduced their Super EVA in-car AI agent driven in-car experience, and said that the activation rate for their Advanced Driver Assistance System (ADAS) was more than 80%

Specifically for Geely’s in-house ADAS, analysts are expecting its development to support future cost reductions and help the company maintain above-industry-average performance

On the back of yesterday's share price sell-off, Bloomberg reported that an analyst upgraded the stock yesterday with a HKD 27 price target - which may suggest that the sell-off was perceived as overdone by at least one analyst

Macquarie's trending Geely put warrant $Geely MB ePW261005(93ZW.SI)$ (https://warrants.com.sg/tools/livematrix/93ZW) rose 22.4% to SGD 0.071 yesterday on Geely's 6.1% fall, while trending call warrant $Geely MB eCW261103(IMOW.SI)$ (https://warrants.com.sg/tools/livematrix/IMOW) fell 30% to SGD 0.028

Investors keen to participate in the share price volatility of Geely shares may consider using either the trending call or put warrant to gain magnified exposure to the share price in Singapore dollars

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Comments

  • FranklinMorley
    06-23 17:53
    FranklinMorley
    6% on no hard news does look like rotation panic. That 80% ADAS activation bit matters more to me — does the market just not care till execution shows up?
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