Group 1 - The company reported Q1 2025 revenue of 72.5 billion yuan, a year-on-year increase of 24.5%, and a net profit attributable to shareholders of 5.67 billion yuan, a year-on-year increase of 263.4%, exceeding the performance forecast median [1] - Total sales for Q1 reached 704,000 units, with a year-on-year increase of 48.0% and a quarter-on-quarter increase of 2.5%; the average selling price (ASP) per vehicle was 103,000 yuan, a year-on-year decrease of 15.8% due to price competition and an increase in the proportion of lower-priced Geely brand sales [1] - The gross margin for Q1 was 15.8%, a year-on-year increase of 0.2 percentage points, primarily due to scale effects and improved profitability of new energy products [1] Group 2 - The company achieved significant cost control, with sales, R&D, and administrative expense ratios for Q1 at 5.0%, 4.6%, and 2.0%, respectively, showing year-on-year decreases of 2.1, 0.0, and 0.5 percentage points [1] - Other income for Q1 was 3.59 billion yuan, with year-on-year increases of 753.4% and 1613.1%, mainly attributed to foreign exchange gains [1] - After excluding other income and share-based payment expenses, the net profit for Q1 was 2.44 billion yuan, a year-on-year increase of 84.3%, with overall profit per vehicle at 2,900 yuan, a year-on-year increase of 59.1% [1] Group 3 - The company announced plans to acquire all issued shares of Zeekr, further implementing the "Taizhou Declaration" to focus on the automotive main business, enhance resource utilization efficiency, and strengthen its global competitiveness in the smart new energy vehicle sector [2] - The company maintains its net profit forecasts for 2025, 2026, and 2027 at 14.2 billion, 19.6 billion, and 27.1 billion yuan, respectively, with corresponding price-to-earnings ratios of 11, 8, and 6 times, maintaining a "buy" rating for Geely Automobile [2]

Group 1 - The core viewpoint of the article highlights the significant financial performance of Geely Automobile in Q1 2025, with a revenue of 72.5 billion yuan, representing a 25% year-on-year increase, and a net profit of 5.67 billion yuan, showing a remarkable 264% growth in profitability [2] - Geely's gross profit surged to 11.4 billion yuan, achieving a gross margin of 15.8%, attributed to improved profitability in the new energy sector and the release of scale effects [2] - The integration of Zeekr and Lynk & Co brands into Geely is a strategic move aimed at enhancing internal resource integration and operational efficiency, as emphasized by the CEO, who stated that the market does not allow for errors [3] Group 2 - The integration aims to implement the "Taizhou Declaration," focusing on the automotive industry and creating a unified Geely to reduce costs and enhance long-term value [3] - The first quarterly report post-integration shows Zeekr's net loss significantly narrowed by over 60% year-on-year, with a profit of 510 million yuan under Hong Kong accounting standards, marking the best financial performance for both brands in the same period [3] - Geely plans to achieve substantial savings in R&D and procurement, targeting a reduction in management and marketing expenses through enhanced collaboration in back-office operations [4]

Summary of Geely Automobile Conference Call Company Overview - **Company**: Geely Automobile - **Industry**: Automobile Manufacturing Key Financial Results - **Net Profit**: Reported Rmb5,672 million for Q1 2025, a 264% increase YoY and 58% increase QoQ [2] - **Normalized Net Profit**: Approximately Rmb3.5 billion, up 126% YoY and 72% QoQ, excluding one-off foreign exchange gains [2] - **Operating Income**: Rmb6,604 million, up 443% YoY, with an operating margin reaching a new high of 9.1% [2] - **Gross Profit Margin (GPM)**: Remained flat YoY at 15.8% despite increased sales volume [3] - **Sales Volume**: Increased by 48% YoY to 704,000 units, but revenue only increased by 25% YoY, indicating a decline in average selling price (ASP) [3] ASP and Revenue Insights - **Blended ASP**: Rmb87,000, down 16% YoY, attributed to: - Declining export contribution from 21% in Q1 2024 to 14% in Q1 2025 - Lower contribution from Zeekr and Lynk brands by 3.6 percentage points YoY - Aggressive pricing strategy for newly launched Galaxy models [3] - **Net Profit per Car**: Rmb5,046, up 18% YoY and 44% QoQ, but still considered low within the industry [3] Strategic Outlook - **Product Launch**: Geely Galaxy launched the new Xingyao 8 model, priced approximately Rmb40,000 lower than BYD Han, targeting the same market segment [4] - **Market Dynamics**: Mass-market EVs are benefiting from trade-in incentives, but there is a risk of intense competition post-2026 when trade-in subsidies expire [4] - **Zeekr Privatization**: Remains a key focus for future developments [4] Valuation and Market Position - **Current Valuation**: Trading at 16x 2025E PE, with a price target of HK$15 based on a sum-of-the-parts (SOTP) valuation approach [5] - **Market Capitalization**: HK$193 billion (approximately US$24.7 billion) [6] - **Price Performance**: Current price as of May 14, 2025, is HK$19.14, with a 12-month rating of Neutral [6][28] Risks and Considerations - **Downside Risks**: - Potential slowdown in the Chinese auto industry - Intensifying competition within the industry - Uncertainty surrounding the Lynk & Co brand initiative [14] - **Upside Risks**: - Strong government stimulus policies to boost auto demand - Higher-than-expected sales volumes for Geely - Improved pricing environment [14] Financial Forecasts - **Revenue Projections**: Expected to grow from Rmb240,194 million in 2024 to Rmb295,096 million in 2025 [9] - **Net Earnings**: Projected to increase from Rmb16,632 million in 2024 to Rmb11,279 million in 2025 [9] - **EPS Estimates**: Expected to be Rmb1.12 for 2025, with a gradual increase in subsequent years [7] Conclusion Geely Automobile has shown significant growth in net profit and operating income, although challenges remain in terms of ASP and market competition. The company's strategic initiatives, including new product launches and potential privatization of Zeekr, will be crucial in navigating the evolving automotive landscape.

Investment Rating - The report maintains a "Buy" rating for Geely Automobile [1] Core Views - Geely Automobile's Q1 2025 performance met expectations, with revenue of 72.5 billion yuan, a year-on-year increase of 24.5%, and a net profit of 5.67 billion yuan, up 263.4% year-on-year [7] - The company has announced plans to acquire all issued shares of Zeekr, further implementing the "Taizhou Declaration" to focus on its core automotive business and enhance resource utilization efficiency [7] - The report forecasts Geely's net profit for 2025, 2026, and 2027 to be 14.2 billion, 19.6 billion, and 27.1 billion yuan respectively, corresponding to P/E ratios of 11, 8, and 6 times [7] Financial Performance Summary - Total revenue projections for Geely are as follows: 179.846 billion yuan for 2023, 240.194 billion yuan for 2024, 302.055 billion yuan for 2025, 382.115 billion yuan for 2026, and 455.664 billion yuan for 2027, with year-on-year growth rates of 21.06%, 33.56%, 25.75%, 26.51%, and 19.25% respectively [1] - The projected net profit for 2023 is 5.308 billion yuan, increasing to 16.632 billion yuan in 2024, then decreasing to 14.208 billion yuan in 2025, before rising to 19.579 billion yuan in 2026 and 27.100 billion yuan in 2027, with year-on-year growth rates of 0.91%, 213.32%, -14.57%, 37.80%, and 38.42% respectively [1] - The latest diluted EPS is projected to be 0.53 yuan for 2023, 1.65 yuan for 2024, 1.41 yuan for 2025, 1.94 yuan for 2026, and 2.69 yuan for 2027 [1] Market Data Summary - The closing price of Geely Automobile is 19.74 HKD, with a market capitalization of approximately 183.32 billion HKD [5] - The company has a price-to-book ratio of 2.09 and a debt-to-asset ratio of 65.83% [6]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 29.65 [7][12]. Core Views - The company reported Q1 revenue of RMB 72.5 billion, a year-on-year increase of 25%, and a net profit attributable to shareholders of RMB 5.7 billion, up 264% year-on-year, aligning with expectations [1][5]. - The company is expected to benefit from the new car cycle driven by the GEA platform, with strong sales of new models like the Xingyao 8, which is projected to sell over 8,000 units monthly [4][12]. - The proposed privatization of Zeekr by Geely aims to enhance internal integration and reduce inefficiencies, potentially increasing group efficiency by over 5% and improving R&D and management efficiency by 15-20% [3][12]. Financial Performance - In Q1 2025, the company sold 700,000 new vehicles, a 48% increase year-on-year, with a gross margin of 15.8%, reflecting improvements in cost management [2][5]. - The company forecasts revenues of RMB 344.4 billion, RMB 370.8 billion, and RMB 422.5 billion for 2025, 2026, and 2027 respectively, with net profits of RMB 13.8 billion, RMB 15.5 billion, and RMB 19.4 billion for the same years [6][12]. - The report indicates an expected EPS of RMB 1.37, RMB 1.53, and RMB 1.92 for 2025, 2026, and 2027 respectively, with a projected PE ratio of 20x for 2025 [5][12]. Market Outlook - The company is set to launch several new models, including the Lynk & Co Z10 and Zeekr 9X, which are anticipated to enhance revenue and profitability [4][12]. - The report highlights the importance of the GEA platform in driving profitability and operational efficiency, suggesting a positive outlook for the company's future performance [3][12].

Investment Rating - The investment rating for Geely Automobile is "Buy" (maintained) [1] Core Views - The Q1 performance of Geely Automobile met expectations, with a revenue of 72.5 billion yuan, representing a year-on-year increase of 24.5%, and a net profit of 5.67 billion yuan, up 263.4% year-on-year [7] - The company has announced plans to acquire all issued shares of Zeekr, further implementing the "Taizhou Declaration" to focus on the automotive main business and enhance resource utilization efficiency [7] - The overall single-vehicle profitability improved significantly due to scale effects and cost reduction strategies under the "One Geely" initiative [7] Financial Summary - Total revenue forecast for 2023A is 179.846 billion yuan, with a year-on-year growth of 21.06% [1] - The net profit forecast for 2023A is 5.308 billion yuan, with a year-on-year growth of 0.91% [1] - The latest diluted EPS for 2023A is 0.53 yuan per share, with a P/E ratio of 29.71 [1] - The projected net profit for 2025E is 14.208 billion yuan, with a year-on-year decrease of 14.57% [1] - The projected P/E ratios for 2025E, 2026E, and 2027E are 11.10, 8.05, and 5.82 respectively [1]

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The company has shown strong sales growth in April, significantly outperforming the industry average, with total sales reaching 234,100 units, a year-on-year increase of 52.7% [9] - The company is expected to achieve earnings per share (EPS) of 1.27, 1.50, and 1.84 yuan for the years 2025 to 2027, respectively, with a target price set at 19.05 yuan [2] - The report highlights the impressive performance of the Galaxy series and the launch of new models, which are expected to drive future sales growth [9] Financial Forecasts - Revenue is projected to grow from 179,204 million yuan in 2023 to 414,141 million yuan in 2027, with a compound annual growth rate (CAGR) of 16.5% [4] - Operating profit is expected to increase from 3,806 million yuan in 2023 to 17,395 million yuan in 2027, reflecting a significant growth trajectory [4] - Net profit attributable to the parent company is forecasted to rise from 5,308 million yuan in 2023 to 18,526 million yuan in 2027, with a notable increase of 213.3% in 2024 [4] Sales Performance - In April, the company's sales of new energy vehicles reached 125,600 units, a year-on-year increase of 144.2% [9] - The Galaxy brand has shown remarkable sales performance, with 96,600 units sold in April, representing a year-on-year increase of 281.1% [9] - The report notes the launch of several new models, including the Galaxy Star耀 8 and the Zeekr 007 GT, which are expected to enhance the company's market presence [9]

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The company is expected to achieve EPS of 1.27, 1.50, and 1.84 RMB for the years 2025-2027, with a target price set at 19.05 RMB or 20.67 HKD, based on a PE valuation of 15 times for comparable companies [2] - April sales growth significantly outperformed the industry average, with total sales reaching 234,100 units, a year-on-year increase of 52.7% and a month-on-month increase of 0.8% [9] Financial Forecasts - Revenue projections for 2023A to 2027E are as follows: 179,204 million RMB, 240,194 million RMB, 299,782 million RMB, 355,561 million RMB, and 414,141 million RMB, with year-on-year growth rates of 21.1%, 34.0%, 24.8%, 18.6%, and 16.5% respectively [4] - Operating profit is forecasted to grow from 3,806 million RMB in 2023A to 17,395 million RMB in 2027E, with a notable increase of 100.8% in 2024A [4] - Net profit attributable to the parent company is expected to be 5,308 million RMB in 2023A, increasing to 18,526 million RMB by 2027E, with a significant jump of 213.3% in 2024A [4] Sales Performance - The company's Galaxy series has shown remarkable sales performance, with 96,600 units sold in April 2025, representing a year-on-year increase of 281.1% [9] - The company’s electric vehicle sales reached 125,600 units in April, marking a year-on-year growth of 144.2% [9] Market Position - The company is actively expanding its global footprint, with the launch of the Lynk & Co 900 and significant exports to the European market [9]

Core Viewpoint - Geely Auto plans to acquire all issued shares of Zeekr at a suggested purchase price of $2.57 per share or $25.66 per American Depositary Share, aiming for full integration of Zeekr as a wholly-owned subsidiary [1][2] Group 1: Acquisition Details - The acquisition price represents a premium of approximately 13.6% over the last trading day closing price of Zeekr's American Depositary Shares on the NYSE and a 20% premium over the volume-weighted average price for the last 30 trading days [1] - Geely currently holds about 65.7% of Zeekr's shares, and upon completion of the transaction, Zeekr will be fully merged into Geely Auto [1] Group 2: Strategic Implications - This acquisition is seen as a further implementation of the "Taizhou Declaration," which aims to consolidate brands under Geely Auto, enhancing brand positioning and internal resource integration [2] - Full ownership of Zeekr is expected to improve Geely's profitability, as Zeekr has shown continuous improvement in earnings, with a reported profit of 150 million yuan in Q4 2024 [2] Group 3: Product Strategy and Innovation - Geely Auto is set to launch 10 new energy models in 2025, including 5 new models and several facelifts under the Geely brand, alongside new models from Zeekr and Lynk & Co [3] - The company is focusing on electrification and intelligence, with significant advancements in smart driving capabilities expected across its new and updated models [3][4] Group 4: Financial Outlook - The new GEA architecture supports the upcoming product cycle, with a solid foundation in fuel vehicles and innovative overseas expansion strategies [4] - Geely Auto's net profit for 2025 is projected to be 16.1 billion yuan, with a corresponding PE ratio of 9.8X, indicating strong profitability potential [4]

Investment Rating - The report maintains a "Strong Buy" rating for Geely Automobile, expecting it to outperform the benchmark index by over 20% in the next six months [6][19]. Core Views - Geely Automobile reported excellent performance in Q1 2025, achieving revenue of 72.5 billion yuan, a year-on-year increase of 25%, and a net profit of 5.7 billion yuan, up 41 million yuan year-on-year [2][9]. - The company is restructuring its organizational framework to enhance management efficiency and synergy under the "One Geely" strategy, following the acquisition of Zeekr Technology [4][9]. - The electric and intelligent transformation is progressing, with new models set to launch in 2025, and the integration of its four major brands is expected to reduce costs and increase efficiency [9]. Financial Performance Summary - **Revenue and Profitability**: In Q1 2025, Geely sold 700,000 vehicles, a 48% increase year-on-year, leading to a revenue of 72.5 billion yuan. The gross margin was 15.8%, with a net profit of 5.7 billion yuan, reflecting a significant improvement [9]. - **Future Projections**: The report forecasts total sales of 2.74 million, 3.24 million, and 3.75 million vehicles for 2025-2027, with corresponding revenues of 336.4 billion, 442.0 billion, and 514.2 billion yuan, respectively [9][10]. - **Earnings Per Share (EPS)**: Expected EPS for 2025 is 1.47 yuan, with a projected PE ratio of 12.4 times [5][10]. Market Position and Valuation - The target price range for Geely is set between 23.89 and 28.66 HKD, with a potential upside of 21% to 45% based on historical valuation levels and recent market performance [6][9]. - The company's total market capitalization is approximately 198.94 billion HKD, with a current share price of 19.74 HKD [6][10].