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1H17 earnings expected to rise >100%YoY Geely preannounced its net profit might grow >100% YoY in 1H17, implying >Rmb3.82bn. Trends to watch 1H17 may beat expectations; profitability per car continues to rise. Geely expects its 1H17 earnings to rise >100% YoY & >19% HoH; we attribute this to: 1) we estimate Geely’s Generation 3.0 models’ GPM is +0.5ppt HoH to 19.1% in 1H17; 2) costs should be well controlled, with SG cost ratios further reduced 0.5~0.6ppt; and, 3) sales structure continues to be optimized, SUVs contributed 45% in 1H17, and 50% in June. Besides, NP/car +6% YoY & +9% HoH in 1H17, representing higher profitability per car. 1H17 sales set new record, thanks to stronger product and brand. Geely’s 1H17 sales volume was 530,627 (+89% YoY & +9% HoH), a new YoY growth record. Its product portfolio keeps improving and its Generation 3.0 products have
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