Gao Hua Commentary:Geely 2H2016earnings beat

On Mar 22, Geely announced 2H2016 revenue/earnings ofRmb35.6bn/3.2bn, +8%/+22% vs. GHe.

We remain Buy (CL) on Geely. Our 12-month target price of HK$13.21 isbased on 75% base case (a value of HK$12.56, a 31% 2016E-19E EPS CAGRand a 2017E PE of 13.6X) and 25% upside case (a value of HK$14.60, a 41%2016E-19E EPS CAGR and a 2017E PE of 14.6X).

Risks: Slower car market growth on economic slowdown and/or phase-outof purchase tax rebate; higher price erosion on tough competition; lowervolume/price and higher SG&A expenses for Lynk & Co.