Seeking Alpha: Geely Automobile Leveraging A New Approach

I've see-sawed on Geely Automobile (OTCPK:GELYY) in the past and that has worked out pretty well given the up-and-down performance of the company over the last five years. I was pretty positive on Geely back in August, though, and the shares have risen more than 20% since that article, even with a 20% decline from April's highs. I believe the gains in Geely have come on the recognition that the company's efforts to restructure its dealership network and model line-up are solid moves that can produce real benefits down the line.

I believe the share weakness in Geely since April has had a lot to do with weaker overall industry sales performance and the subsequent decision by many industry participants to cut prices. I can't rule out the risk that this slowdown drags Geely's yoy unit sales down, but I think Geely's approach to take a Hyundai and/or Xiaomi-like approach to the Chinese auto market is a good one that can produce better results for years to come. Geely's ADRs should trade closer to $12 in the near term, with further upside potential if the company can truly leverage synergies with Volvo.

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Geely Automobile Leveraging A New Approach