Geely Automobile is hiving off its young electric vehicle brand, Zeekr. The Hong Kong-listed group’s chairman and founder Li Shufu has a lot riding on how the deal is positioned as the valuations of its homegrown rivals crash.
: assuming Zeekr doubles first-half sales of $1.2 billion by the end of this year, apply these three peers’ average forward price-to-sales multiple of 3.9, and the unit is worth some $9.4 billion.
Geely owned 58% of loss-making Zeekr per an August filing, implying its share of the unit might be worth as much as $5.5 billion, or roughly half of the listed company’s current market capitalisation. Exclude Tesla , and it is worth just a fifth. Li has reason to be hopeful but investors will decide where rubber meets the road. Follow @Breakingviews on Twitter
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