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<Research>BOCI: GEELY AUTO's Proposed Privatization of Zeekr Helps Narrow Valuation Discounts Against NEV Counterparts
Recommend 9 Positive 27 Negative 15 |
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GEELY AUTO (00175.HK) has announced a non-binding proposal to privatize Zeekr (ZK.US), under which Zeekr shareholders can choose to receive either US$2.566 in cash per share or 1.23 new Geely Auto shares for each Zeekr share, according to a report from BOCI. Since Zeekr's establishment over four years ago, Geely Auto has added its stake in the company from the initial 51% to the current 65.7% by participating in its IPO and acquiring shares from its controlling shareholder Geely Group. BOCI viewed both the spin-off of Zeekr four years ago and the current privatization plan as proactive initiatives by Geely Auto to serve its business strategy at different stages of development. Looking ahead, the broker anticipated the integration of Zeekr's business and its return to Geely to strengthen the listed company's strategic position as the group's core vehicle asset and help narrow the valuation discounts between Geely and its new energy vehicle (NEV) counterparts. If the market overreaction triggers a pullback in Geely Auto's stock price, it will bring an entry opportunity to long-term investors. BOCI kept the Buy rating and the target price of $27 unchanged. AAStocks Financial News |
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