Written by Cláudio Afonso | LinkedIn | X
Citi analyst Jeff Chung has initiated on Monday coverage on the shares from Geely’s premium EV brand Zeekr setting a Buy rating and a price target of $32.40. Based on Friday’s closing price, the price target implies an upside potential of 53 percent.
In a new research note, the analyst highlighted Zeekr’s asset-light model and the sustained revenue achieved so far.
“We initiate Zeekr with Buy/High Risk considering its asset-light model empowered by Geely group, strong model cycle ahead and sustained revenue and earnings contribution from Ningbo Viridi and CEVT,” Chung wrote.
Zeekr recently reported its financial results for the first quarter of 2024, revealing total revenues of $2.04 billion (RMB 14,736.8 million). The company’s gross margin increased to 11.8 percent from 7.9 percent the previous year, although it was lower than the 14.2 percent reported in the last quarter of 2023.
“Our target price of $32.40 is based on 0.7x 2024E P/S, which is one standard deviation below weighted average 2024E P/S of New Energy Vehicles (NEV) players (BYD, Nio, Li, Xpeng, Leapmotor),” the analyst added.
Earlier today, Zeekr saw the first batch of electric vehicles arriving in the Mexican market as part of its global expansion strategy.
This milestone follows a Vehicle Procurement Agreement signed in February between Geely Auto and Zeekr. The agreement, effective February 7, facilitates the purchase and resale of Zeekr’s new energy vehicles (NEVs) and aftermarket parts in Mexico.
The deal sets annual purchase caps at approximately $98.7 million for 2024, $229.1 million for 2025, and $457.3 million for 2026.
In May, Zeekr achieved a new monthly record by delivering 18,616 vehicles, marking a 115 percent year-over-year increase.
Written by Cláudio Afonso | LinkedIn | X
