Geely Automobiles to Acquire Meizu – Report

Geely Automobile Holdings (GELYF) plans to acquire domestic smartphone maker Meizu Technology. Nikkei Asia reports that the acquisition is part of the company’s push to expand into mobile devices as it also looks to offer services for linking autos and communication. GELYF shares rose 0.41% to close at $2.46 on January 21.

Geely Automobile is an investment company specializing in the research, design, manufacturing, and sale of sedans and other related automobile components. Geely Automobile’s upcoming earnings report for Q4 2021 is scheduled for March 23, 2022.

Meizu Acquisition

While Geely has yet to confirm whether it is acquiring Meizu, it is intent on establishing a foothold in its recently established smartphone business. Founded in 2003, Meizu has received funding from Alibaba (BABA) and sold over 20 million smartphones at its peak.

The acquisition push comes barely a year after Geely’s Chairman Eric Li teamed up with other investors to set up a smartphone company in Wuhan. Hubei Xingji Shidai Technology is the smartphone outfit that has already started poaching talent from Xiaomi and other big brands.

Automobile Ambitions

In another news, Geely Automobiles is teaming up with France’s Renault SA (RNLSY) for the launch of a new vehicle in South Korea. MarketWatch reports that the two companies intend to design, manufacture, and launch internal combustion engine models.

The vehicles up for development will leverage Geely’s compact modular architecture developed in Sweden. Renault Group and Renault Samsung Motors are tasked with focusing on the design aspect of the car as well as customer service. Production should begin in 2024.

Stock Rating

Recently, Credit Suisse analyst Bin Wang reiterated a Hold rating on Geely Automobile stock with a $3.34 price target, implying 35.72% upside potential to current levels.

Consensus among analysts is a Moderate Buy based on 2 Buys and 1 Hold. The average Geely Automobile price target of $3.20 implies 30.08% upside potential to current levels.

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