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My investment in Geely Auto (0175.HK)
26 Mar 2021 (166 views)

I bought 20,000 shares of Geely Auto at average of $22.80 HKD prior to the release of the 2020 financial results.

The results showed a drop of about 24% in net income. This was expected.
https://www.investing.com/equities/geely-auto-financial-summary

However, there was another news that was negative - their application to join the Shanghai Star Board listing for high tech shares hit a snag. 

https://www.bloomberg.com/news/articles/2021-03-23/geely-star-board-listing-hits-snag-on-concern-it-s-not-high-tech

As a result of the two catalysts, the stock price dropped by 14% to $19.68, giving me a loss of $90,000 (SGD 15,600).

A retail investor, who is knowledgeable about this company, said that the listed company is involved mainly in the manufacture of conventional cars and that the new joint ventures in electric vehicles are carried out at the parent company, called Zhejiang Geely Holding.

This is another catalyst for the decline in the stock price. 

I carried out a further research and come with the following preliminary conclusions:

* The listed subsidiary (i.e. Geely Auto) is the main manufacturing vehicle for the group.
* All joint ventures will eventually involve the listed subsidary to be the executing arm.
* I expect that the parent company will inject the high tech joint ventures into the listed subsidary, so that it will qualify for the Star Board listing.

Note: I am not really familiar with this company, so my preliminary conclusions could be wrong!

Anyway, I have decided to hold on to my current investment and maybe add more shares to take advantage of the drop in price. 

The price has increased by 3.4% today to HK$ 20.35.

Tan Kin Lian
Note - I am sharing my views and not giving investment advice. 




 


My investment in Geely Auto (0175.HK)
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I bought 20,000 shares of Geely Auto at average of $22.80 HKD prior to the release of the 2020 financial results.

The results showed a drop of about 24% in net income. This was expected.
https://www.investing.com/equities/geely-auto-financial-summary

However, there was another news that was negative - their application to join the Shanghai Star Board listing for high tech shares hit a snag. 

https://www.bloomberg.com/news/articles/2021-03-23/geely-star-board-listing-hits-snag-on-concern-it-s-not-high-tech

As a result of the two catalysts, the stock price dropped by 14% to $19.68, giving me a loss of $90,000 (SGD 15,600).

A retail investor, who is knowledgeable about this company, said that the listed company is involved mainly in the manufacture of conventional cars and that the new joint ventures in electric vehicles are carried out at the parent company, called Zhejiang Geely Holding.

This is another catalyst for the decline in the stock price. 

I carried out a further research and come with the following preliminary conclusions:

* The listed subsidiary (i.e. Geely Auto) is the main manufacturing vehicle for the group.
* All joint ventures will eventually involve the listed subsidary to be the executing arm.
* I expect that the parent company will inject the high tech joint ventures into the listed subsidary, so that it will qualify for the Star Board listing.

Note: I am not really familiar with this company, so my preliminary conclusions could be wrong!

Anyway, I have decided to hold on to my current investment and maybe add more shares to take advantage of the drop in price. 

The price has increased by 3.4% today to HK$ 20.35.

Tan Kin Lian
Note - I am sharing my views and not giving investment advice.