Geely Automobile reports a 32% decline in its full-year profit.

Geely Automobile Holdings Ltd (HKG: 0175) said on Tuesday that its full-year profit posted a 32% decline in 2020. The company said it planned on joining hands with its parent organisation, Zhejiang Geely Holding Group, to launch Zeekr – a new brand that will be specially dedicated to the production of electric vehicles.

Geely Automobile shares opened at £2.26 per share on Tuesday and are currently exchanging hands at a lower £2.11 per share. In comparison, the stock had started the year 2021 at a higher £2.52 per share after recovering from a low of £1.0 per share in the last week of May 2020. The price action should come in handy if you are interested in investing in the stock market.

Geely Automobile will have a 51% ownership stake in Zeekr

Are you looking for fast-news, hot-tips and market analysis?

Sign-up for the Invezz newsletter, today.

Geely Automobile said that Zeekr will also focus on EV research and development. The car manufacturer and its parent company will jointly invest £220 million to launch the new brand. Geely Automobile will have a 51% ownership stake in Zeekr. 

The Taizhou-based company reported £620 million of profit for 2020. In the previous year, its profit stood at a higher £910 million. The decline in profit, as per Geely Automobile, was due to the ongoing Coronavirus pandemic that disrupted production and weighed on car sales last year.

The Chinese automaker valued its revenue in the recently concluded year at £10.27 billion that represents a 5% decline from 2019. According to Geely Automobile, car sales came in at 1.32 million in 2020 versus the year-ago figure of 1.36 million. This year, the car manufacturer expressed confidence, it will sell a higher 1.53 million cars.

Geely Automobile abandoned plans of merging with Volvo

In February, Geely Automobile said it had withdrawn from plans of merging with Volvo. It, however, still partnered with the Swedish multinational to expand its footprint in electric vehicles. With such tie-ups, Zhejiang Geely Holding Group wants to become a leading engineering service provider and EV contract manufacturer.

In a report published in October, AB Volvo had noted a 61% increase in order intake in its fiscal third quarter.

Geely Automobile Holdings Ltd performed largely upbeat in the stock market last year with an annual gain of more than 70%. At the time of writing, the Chinese car manufacturer has a market cap of £20.72 billion and a price to earnings ratio of 27.