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A. Stotz Investment Research

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Geely (175 HK): SUVs and Crossovers to Drive Growth

Geely: Vehicle Maker to Win on Local Demand, New SUV

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Equity Bottom-Up

<ul><li>Solid long-term earnings growth and strong cash levels relative to its sector</li><li>Geely should enhance product mix further, launching seven new models in 2018 including up to three SUVs; sales volume up by 72% in 10M17 YoY and improved margin from larger share of higher priced SUVs</li><li>The 6,000 Lynk &amp; Co 01 available for presale on November 17 sold out in 137 seconds, the price range of US$24-31,000 should make it a serious competitor in the Chinese market</li><li>Still attractive at a 18CE* PEG ratio of 0.5 versus Asian sector at 0.7</li><li>Risks: Negative impact from loss-making assets in Proton and Lotus from parent, slow down in Chinese economy</li></ul><p><em>* Consensus Estimates</em></p>

Solid long-term earnings growth and strong cash levels relative to its sectorGeely should enhance product mix further, launching seven new models in 2018 including up to three SUVs; sales volume up by 72% in 10M17 YoY and improved margin from larger share of higher priced SUVsThe 6,000 Lynk &amp; Co 01 available for presale on November 17 sold out in 137 seconds, the price range of US$24-31,000 should make it a serious competitor in the Chinese marketStill attractive at a 18CE* PEG ratio of 0.5 versus Asian sector at 0.7Risks: Negative impact from loss-making assets in Proton and Lotus from parent, slow down in Chinese economy* Consensus Estimates

Geely Auto

Geely (175 HK): Gone in 137 Seconds