UBS wrote in a research report that the IPO size of Zeekr, an EV-making subsidiary of GEELY AUTO (00175.HK) -0.140 (-1.417%) Short selling $58.27M; Ratio 22.074% , was relatively small at around US$6.2 billion, with a valuation significantly lower than the previously expected approx. US$9.4 billion. The broker believed that the spin-off of Zeekr's equity dilution is relatively limited, and the flexibility of GEELY's stake may insulate its valuation from conglomerate discounts.
The broker remained bullish on GEELY, with a target price of HK$13 and a Buy rating.
UBS highlighted that Zeekr's gross margins in 2023 are higher than those of NIO-SW (09866.HK) -1.050 (-2.428%) Short selling $103.96M; Ratio 52.193% (NIO.US) and XPENG-W (09868.HK) -2.100 (-6.114%) Short selling $214.68M; Ratio 32.005% , year-to-date sales growth has been strong, and its net loss in 2023 is less than that of NIO and XPENG. After the proposed listing, the broker believed GEELY could further reduce its stake in Zeekr for cash in the open market or distribute its stake in Zeekr to shareholders, depending on market conditions.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-05-08 16:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)
