Geely Automobile (0175.HK): Geely Acquires 34% Stake in Ford‘s Spain Factory

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Geely Automobile (0175.HK): Geely Acquires 34% Stake in Ford‘s Spain Factory

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23 Jul 2026 08:24:22 ET │ 12 pages

Geely Automobile (0175.HK)

Geely Acquires 34% Stake in Ford's Spain Factory

CITI'S TAKE

Buy According to HKEX filing, Ford and Geely have formally signed an

agreement for the sale of Ford’s idle Body 3 plant in Valencia, Spain to Catalyst Watch: Upside, expires 08-SEP-26

Geely. The plant has an designed annual capacity of 400k units. Geely set Price (23 Jul 26 16:10) HK$18.52

to acquire 34% equity interest in the target for a consideration of Target price HK$30.00

EUR221m. The net-profit-after-tax of the acquired asset yielded EUR70m Expected share price return 62.0%

in FY25 (EUR236m in FY24). If Geely eventually secures 150k annual Expected dividend yield 3.7%

capacity allocation from this factory, we estimate this to be roughly Expected total return 65.7%

equivalent to only 10-20% of the total cost of a newly built green-field

Market Cap HK$199,741M factory. We expect the deal to be finalized around 4Q26 - it should help

US$25,474M Geely penetrate car production in EU at CKD model (i.e. compact electric

hatchback EX2 (Xingyuan model in China). Overall this is likely to be

received positively by the market with EU car sales growing +13% in June

and Chinese OEMs gaining share. Jeff ChungAC

+852-2501-2787

Factory details: The site has faced weak demand in recent years. Ford phased out jeff.m.chung@citi.com

production of Mondeo, S-Max and Galaxy from 2024 onwards. Currently only the

Kuga assembly line remains active, leaving the Body 3 workshop largely under

utilized.

Implications: For Geely, this agreement represents a landmark breakthrough in its

long-term European expansion strategy. A domestic production base should enable