Geely Auto (SEHK:175): Is the Stock Undervalued After Fresh Financing Approval and Surging Sales?

Geely Automobile Holdings (SEHK:175) has just received regulatory approval for a RMB10 billion debt financing quota. This development could reshape its financial approach and capacity for future investments. In addition, unaudited sales data show a considerable jump in vehicle sales for both the month and year to date. These factors set the stage for fresh momentum in the company’s growth story.

See our latest analysis for Geely Automobile Holdings.

The recent spike in unaudited sales and the newly granted RMB10 billion financing quota are fueling optimism around Geely Automobile Holdings. The share price has shot up 36.2% year to date, and the stock’s robust 61.5% total shareholder return over the past 12 months suggests that investors are taking notice of the company's improving fundamentals and growth prospects. Momentum appears to be on Geely’s side, supported by sustained operational gains and an upbeat outlook for the sector.

If Geely’s momentum has you curious about what else is driving the auto sector, now’s a great chance to discover See the full list for free.

Yet with optimism running high and substantial gains already in the share price, the key question becomes: Is Geely still undervalued at current levels, or has the market already factored in its future growth? Could there still be a buying opportunity?

Most Popular Narrative: 27% Undervalued

Geely’s current share price of HK$19.17 stands noticeably below the narrative’s fair value estimate of HK$26.28. The significant gap signals that the market may be lagging behind in factoring in all of Geely’s future potential, according to the prevailing narrative.

The integration of smart driving technologies, including AI applications and autonomous driving features, is expected to enhance the product offering. This could potentially lead to higher average selling prices and improved net margins.

Read the complete narrative.

What bold financial leap backs up this projected value? Hidden in the numbers is a forecast for sustained revenue acceleration and margin power as Geely races into the future. The narrative is built on ambitious assumptions that challenge conventional auto sector thinking. Want to find out what game-changing targets have driven such a steep valuation gap?

Result: Fair Value of $26.28 (UNDERVALUED)

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

However, fierce competition in new energy vehicles and unpredictable global demand could put pressure on Geely's profitability and challenge the current optimistic outlook.

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

Build Your Own Geely Automobile Holdings Narrative

If the current valuation story leaves you unconvinced or you'd like to explore the figures for yourself, you can build your own view in 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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