With Fading Older Models And Chip Shortages, Geely Is Having A Challenging 2021

 

This hasn’t been an easy year so far for Geely Auto (OTCPK:GELYF) (OTCPK:GELYY), as the company has been hit by the well-published shortage in auto semiconductors, a softening Chinese auto sector, and a faster fall-off in sales of older models. The shares have rebounded some since my last update, but the year-to-date performance has still been pretty disappointing, with the roughly 12% decline lagging XPeng (XPEV), BYD (OTCPK:BYDDY) and Great Wall (OTCPK:GWLLY), while outperforming Tesla (TSLA) and Nio (NIO).

I do believe better days are in store for Geely. The company’s newer products continue to outsell the overall Chinese auto market, particularly the Lynk & Co. (“Lynk”) brand, and the company has multiple upcoming new launches that should reenergize sales volumes. I’d also note the well-received launch of the first model under the all-EV Zeekr (or “ZEEKR”) brand. While the Chinese auto market is intensely competitive and the corporate structure of Geely isn’t the best for shareholders, I still believe there are decent return prospects here and this remains a name to consider for investors who want exposure to the Chinese auto market at a reasonable valuation.

 

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With Fading Older Models And Chip Shortages, Geely Is Having A Challenging 2021