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<Research>UBS: Zeekr Spinoff Only Relatively Limited Dilution to GEELY AUTO’s Stake, Good for Unlocking Valuation
Recommend 25 Positive 59 Negative 29 |
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UBS wrote in a research report that the IPO size of Zeekr, an EV-making subsidiary of GEELY AUTO (00175.HK), 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) (NIO.US) and XPENG-W (09868.HK), 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. AAStocks Financial News |
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