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Geely Automobile Holdings (SEHK:175) is set to benefit from new UK rules that require carmakers with weaker electric vehicle sales to buy credits from higher selling peers.
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MG, a brand owned by Geely, has been identified in the UK as one of the leading brands positioned to sell these EV credits.
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The development affects the UK market for electric vehicles and credit trading under the country’s quota system.
For you as an investor looking at SEHK:175, the key point is that MG’s EV mix in the UK gives Geely a potential revenue stream tied directly to regulation, not just car sales. Geely operates a diversified auto business centred on mass market passenger vehicles, and exposure to UK EV credit trading adds another angle to its international profile.
The UK credit regime highlights which automakers can consistently meet or exceed EV quotas. If MG maintains its EV performance in that market, Geely may have additional financial and negotiating flexibility in the UK, with implications for how it allocates capital and positions its brands across Europe.
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Why Geely Automobile Holdings could be great value
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✅ Price vs Analyst Target: At HK$16.09 versus a HK$26.33 analyst target, the share price is roughly 38.9% below consensus.
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✅ Simply Wall St Valuation: The shares are described as trading about 63.9% below an estimated fair value, which is a large gap.
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❌ Recent Momentum: The 30 day return of around 10.1% decline shows recent price pressure.
Check out Simply Wall St’s in depth valuation analysis for Geely Automobile Holdings.
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📊 The UK EV credit news gives MG and therefore Geely a potential regulatory linked income source that does not depend only on selling more cars.
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📊 It may be useful to monitor MG’s EV share in the UK, Geely’s Auto segment margins and how any credit revenue is disclosed in segment reporting over time.
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⚠️ A key risk is that UK rules or MG’s EV sales mix could change, which could reduce the benefit from selling EV credits.
For the full picture including more risks and rewards, check out the complete Geely Automobile Holdings analysis.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
