Seeking Alpha: With Geely Auto, Opportunity Comes Ugly

Sometimes there are good reasons that a stock looks undervalued. In the case of Geely Automobile Holdings (OTCPK:GELYY), you can take you pick as to why analysts or investors may not like the company. The company has a reputation as a low-end manufacturer of cheap cars with dodgy quality, its tie-up with Volvo doesn't really offer much brand value in China, and its earnings quality is definitely lacking.

All of those are, I believe, fair points to flag. What is just as important is to look at what could go right. The company has been investing considerable resources into R&D and has not only closed the quality gap on its domestic peers, it's closing in on foreign JVs. The company is also actively working to refurbish and refresh its line, with a move toward higher-end brands and models. Geely is also the second-largest exporter of cars from Europe and it is my belief that China is not far removed from following in the footsteps of Japanese and Korean car manufacturers in terms of entering Western European and U.S. markets.

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With Geely Auto, Opportunity Comes Ugly