Under the slight growth trend of the overall automobile market, especially in the off-season of the summer automobile market, Geely Automobile's hot sales momentum continued to be strong, and the market performance was strong. It continued to lead Chinese brands to rise against the trend with a high growth rate of 32%. Among them, six models including Boyue, Emgrand GS, Emgrand GL, New Emgrand, and New Vision sold over 10,000 units.
On August 6, Geely Automobile announced the latest sales data for July: the monthly sales volume was 120,277, an increase of 32% over the same period last year. From January to July, the total sales volume of Geely Auto reached 886,907 units, a year-on-year increase of 43%, and has now completed 56% of the annual sales target of 1.58 million units. Such an increase far exceeds the industry growth rate. But contrary to sales, Geely's stock performance has not been satisfactory this year.
High financing brings high risk
As of August 15th, amid the good news, Geely stock has fallen to 15.16 yuan per share, and its market value has also fell to 136.108 billion. Compared with the high of 29.8 yuan per share in November last year, 14.64 yuan per share has evaporated in the past six months, and nearly half of the market value has evaporated.
As at the beginning of this year, on March 21, Geely Automobile announced its 2017 results. The report showed that the annual total revenue increased by 73% to 92.761 billion yuan, and the net profit reached 10.634 billion yuan, an increase of more than 108%. %. However, the beautiful performance failed to inspire the stock price to rise, but closed down on the day, with a drop of as much as 6.18%. Compared with March 20, the market value evaporated by 12.308 billion in one day.
Analyzing the reasons, Geely has achieved rapid development through continuous financing and acquisitions in recent years, and the stock has risen too fast. When Geely acquired Volvo, the stock of Geely Auto was only about 3 Hong Kong dollars. After the acquisition, Geely's stock soared. As of January 10 this year, Geely's stock price reached 27.45 Hong Kong dollars per share. Geely's shares rose 242.2% in the more than a year from late 2016 to early 2018.
High financing is always accompanied by high risk, and the risk is covered up when the economy is developing rapidly. However, with the slowdown of the entire world economy this year, the negative effects brought about by high financing have gradually emerged. The thousand-share limit is the best proof, and the P2P thunderstorm is also the best example.
Excessive reliance on a single market
Since 2014, Geely's auto sales have been increasing. From 427,000 in 2014 to 1.247 million in 2017, an increase of 192% in three years. In the total of last year, there were 264,000 new Emgrands, 145,000 Envision sedans, 124,000 Emgrand GLs, 42,700 Boruis, 286,000 Boyues, and 150,000 Emgrand GSs.
Indeed, despite the slowdown in the overall growth rate of the auto industry last year, Geely Automobile still maintained a 63% sales growth. This kind of high growth after reaching a certain scale is relatively rare in the global automotive industry. However, judging from the export data, Geely's sales outside China have declined across the board.
Although Geely Auto's executives always said in interviews that Geely Auto would go out as "the business card of China's auto industry", the actual situation always backfired. According to data released by Geely, the company's auto exports in 2017 fell by 46% year-on-year, while in 2016, Geely's exports fell by 15.4% year-on-year in 2015. From 118,871 in 2013 to 11,755 in 2017, less than 10% of the number four years ago.
Currently, 99.36% of Geely's salesMost of the products are digested by domestic consumers. In developed countries such as the United States, Japan, South Korea and Europe, where the automobile industry is relatively complete, the sales are even worse. This shows that Geely Auto's dependence on a single market is too strong, and its competitiveness in overseas markets has not been greatly improved due to acquisitions. Once the domestic economy fluctuates, stock prices will naturally fluctuate with it.
New energy may become a breakthrough
The international environment is sluggish, and the domestic economic growth rate shows a phased change, and the growth rate continues to decline. The step-down in the economic growth rate has increased the pressure on all sides, especially those enterprises that are too dependent on a single market and single customer, which will naturally be severely affected.
However, analyzing the economy cannot only look at one side. With the gradual effect of the steady growth policies introduced by the state, there will be more development opportunities for the new trends and bright spots in the economic operation. At present, among its own brands, Geely Auto's industrial system is relatively complete. With the acquisition of Volvo and its investment in Mercedes-Benz, its brand influence has also been greatly improved.
Although Geely's stock price fell in the short-term, from the perspective of Geely's current overall layout, the future prospects are promising. Especially with the development of science and technology, new energy has become the development trend of the world's automobiles, and Geely has a strategy of deploying new energy vehicles a long time ago. In 2016, the sales volume of Geely's new energy vehicles exceeded 40,000 units, which is the highest sales volume in the domestic new energy vehicle industry except BYD.
On March 21, at the performance communication meeting, An Conghui, executive director of Geely Automobile Holdings Co., Ltd., said, "Geely will transform from traditional vehicles to new energy vehicles. Geely is the real new energy vehicle in the future. (brand), all models will be electrified in the future.”
If Geely can seize the opportunity of new energy vehicle development in the future, under the premise of stabilizing the domestic market, to enhance the competitiveness of its products and enhance the overseas market The share of sales volume is likely to double in the future. From this perspective, Geely is still a potential stock.