Notes on EVs
Geely is an interesting EV related stock.
Its deep correction since later January has removed much of the excess optimism, as well as shaking off heavy positions by investors.
Yet its transformation story continues to take shape.
It is small and young enough amongst the automakers (only 1 million-plus units in auto unit sales yearly) to not care about holding on to past legacies. Cognizant of intensifying competition, its management demonstrates financial discipline, is nimble and flexible enough to form partnerships (Baidu, Foxconn and so on) and courageous enough to approach the entire experience of auto ownership differently.
ATEC is not thinking that Geely will emerge a champion in the EV space. The industry is too nascent to decide this presently. Given the way Geely had successfully grown its domestic Autos business in recent history (even having to compete against established giants), we do believe there is enough reason to bet that the company might actually outshine some of their bigger competitors as the EV market takes off in China.
So long as the stock stays above HK$23, ATEC targets HK$40 for it.