- Geely may not be directly hit by the ongoing trade tensions between the U.S. and China, but the Chinese automaker could still be hit in other ways if the dispute drags on, says its vice chairman and chief financial officer, Daniel Li.
- China's third-largest automaker announced a 54 percent year-over-year jump in net profit for the first half of 2018.
- Some analysts remain upbeat about the company's prospects even though Geely's stocks traded lower on Thursday morning.
Geely Automobile, the third-largest carmaker in China, has been largely shielded from the ongoing trade tensions between Beijing and Washington. But the company could still be hit in other ways if the dispute drags on, a top executive said.
Geely doesn't rely on imported parts to make its cars, not does it sell many of its products outside China, which helps the automaker avoid direct hits from the trade dispute, according to Daniel Li, Geely's vice chairman and chief financial officer.
"Geely doesn't have a lot of sales to other countries yet ... we don't have any cars sold to the U.S.," Li told CNBC's "Squawk Box" on Thursday. "Nevertheless, we don't like the trade war," he added.
Li explained that the dispute between the world's two largest economies has generated a lot of uncertainty and is starting to affect consumers' willingness to spend.
His comments come a day after the company announced a 54 percent year-over-year jump in net profit for the first half of 2018. The net profit of 6.67 billion yuan ($971.3 million) is higher than the 6.55 billion yuan estimated by four analysts, according to Thomson Reuters data.
The company sold 766,630 vehicles during the first six months of the year, 44 percent higher than the same period in 2017 and outperforming the overall automobile sales in China, Li said.
Li said the company is on track to meet its full year sales target of 1.58 million units, and has plans to launch five new models later this year, including a multi-purpose vehicle (MPV).
"As you know, China has a new birth policy to encourage every family to have a second child instead of only one child," Li said, explaining that families would soon require more seats in a car to accommodate grandparents, parents and two children. That opens up the opportunity to sell more MPVs, which typically have seven seats, Li said.
Despite the strong earnings report, Geely shares in Hong Kong were down about 1.3 percent on Thursday morning. But some analysts remain upbeat about the company's prospects.
"The outlook for Geely remains strong, in our view, led by a strong product pipeline … Geely is still our top sector pick," analysts from Daiwa Capital Markets wrote in a Wednesday report after the company released its earnings report.
— Reuters contributed to this report.