下車容易上車難

Geely Auto's (0175.HK) HK$1.1 billion turnover Friday, only behind the usual blue-chip suspects Tencent (0700.HK),  China Mobile (0941.HK) and CCB (0939.HK), must have caught some investors' eye. Intraday high of HK$9.48 set a record and shares have now tripled vs below HK$3 in early 2016. 

While it's tempting to take profits, Geely's upside remains and on a two-year horizon, it's not unlikely that the stock could double from the recent low around HK$7.50.

Geely is currently reaping the benefits of a powerful model cycle which is driving significant volume growth. While it's of course premature to declare the Zhejiang-based auto maker Huawei of China's auto industry, Geely in my view is the best positioned among China's homegrown auto makers to break away from the pack. 

Short term, monthly sales data should remain robust. Medium term, focus should be on Lynk & Co's expected launch in 4Q17. Lynk & Co brand is Geely's ambitious push into higher-end product segment, which if successfully executed, could serve as an important long-term re-rating catalyst. 

成敗在此一舉

That a stock has risen so much should never be the reason not to own the stock, which is one of the common misconceptions by retail investors. Fasten your seat belts and enjoy the ride on Geely's drive toward glory.