Summary of the Conference Call on 2025 Sales Targets for Geely Automobile Company Overview - **Company**: Geely Automobile - **Industry**: Automotive, specifically focusing on traditional fuel vehicles and new energy vehicles (NEVs) Key Points and Arguments Sales Performance and Targets - In 2024, Geely achieved a record sales volume of over 2.17 million units, exceeding the target of 2 million units by 9%, with a year-on-year growth of 32% [1][20] - The sales target for 2025 is set at 2.71 million units, which includes an export target of 467,000 units, reflecting a growth rate of over 15% [7][22] - The company aims for NEV sales to reach 1.5 million units in 2025, a 69% increase from 2024, with a penetration rate exceeding 55% [5][22] Brand Performance - Geely brand sales in 2024 reached 1.669 million units, a 27% increase, with the new high-end series contributing 448,000 units [2] - The Geely Galaxy series and the Geely New Energy vehicles have shown significant market performance, with the Galaxy New Energy vehicle achieving over 50,000 deliveries in just 80 days [3][23] - The Geely brand is positioned as a leader in the domestic NEV market, with a notable increase in overseas sales, which reached 404,000 units, a 53% increase year-on-year [2] Market Trends and Strategic Focus - The automotive market is expected to maintain steady growth, with structural changes becoming more pronounced, particularly in the NEV segment [4] - Geely is focusing on enhancing its international presence and brand recognition, with plans to accelerate overseas production and sales [4][36] - The company is committed to addressing macroeconomic trends and potential risks associated with global market uncertainties [4] Profitability and Financial Goals - A key goal for 2025 is for the NEV segment to achieve profitability, building on a significant turnaround in the third quarter of 2024 [8] - The management emphasizes that achieving profitability is crucial for sustainable growth and shareholder returns [8][41] ESG and Corporate Responsibility - Geely has been recognized for its ESG performance, ranking first in the Chinese automotive industry, and plans to enhance its ESG initiatives further [9] - The company is committed to maintaining product quality and social responsibility amidst fierce market competition [9] Product Development and Innovation - Geely plans to launch several new models in 2025, including four to five new energy vehicles, to fill gaps in its product lineup [24][27] - The company is investing in smart technology and AI integration to enhance vehicle performance and user experience [32][33] Challenges and Competitive Landscape - The automotive industry is facing challenges such as increased competition and technological changes, but Geely remains confident in its product competitiveness [4][40] - The company aims to avoid price wars and instead focus on value and technological superiority to maintain market competitiveness [39] Additional Important Content - Geely's inventory levels are at historical lows, allowing for a more confident approach to meeting 2025 targets [7] - The company is actively working on integrating its brands and optimizing its operational efficiency to enhance overall performance [10][19] - The management team expresses strong confidence in achieving the set targets for 2025, emphasizing a dual focus on sales and profitability [41]

Core Viewpoint - The article emphasizes the importance of value investing and highlights Geely Automobile (GELYY) as a strong candidate for value investors due to its favorable financial metrics and strong earnings outlook [1][2][6]. Company Summary - Geely Automobile (GELYY) currently holds a Zacks Rank of 1 (Strong Buy) and a Value grade of A, indicating strong potential for value investors [4]. - The stock has a P/E ratio of 8.26, which is lower than the industry average P/E of 8.87, suggesting it may be undervalued [4]. - Over the past 12 months, GELYY's Forward P/E has fluctuated between a high of 17.07 and a low of 6.71, with a median of 11.13, indicating variability in market perception [4]. - The P/B ratio for GELYY is 0.87, which is also lower than the industry average P/B of 0.95, further supporting the notion of undervaluation [5]. - GELYY's P/B has ranged from a high of 1.17 to a low of 0.82 over the past year, with a median of 0.98, reflecting its market value relative to book value [5]. - Overall, the financial metrics suggest that Geely Automobile is likely undervalued, making it an attractive option for value investors [6].

Investment Rating - The report maintains a "Buy" rating for Geely Automobile with a target price of HKD 19.0, indicating a potential upside of 35% from the current price of HKD 14.1 [1][4][3]. Core Insights - Geely Automobile achieved a total sales volume of 2.177 million units in 2024, representing a year-on-year growth of 32%, exceeding its sales target [2][3]. - The report highlights the strong performance of Geely's brands, driven by new technologies and product upgrades, which are expected to continue fueling sales and revenue growth [1][3]. - The company aims for a sales target of 2.71 million units in 2025, with a focus on new energy vehicles (NEVs) and a projected NEV sales volume of 1.5 million units, reflecting a growth of 69% [3][2]. Sales Performance - In December 2024, Geely's total sales reached 210,000 units, a year-on-year increase of 43%, with the Geely brand alone selling 157,000 units, up 46% year-on-year [2]. - The cumulative sales for the Geely brand in 2024 were 1.669 million units, a 27.4% increase, while Zeekr and Lynk & Co brands saw significant growth of 87.2% and 29.6% respectively [2][3]. Financial Projections - The report projects Geely's revenue to grow from RMB 179.2 billion in FY2023 to RMB 239.3 billion in FY2024, marking a growth rate of 34% [7]. - Net profit is expected to increase significantly to RMB 15.8 billion in FY2024, reflecting a growth rate of 197% compared to the previous year [7]. - The gross margin is projected to improve gradually, reaching 16.5% by FY2026 [7]. Product Strategy - Geely plans to launch five new energy products in 2025, including two SUVs and three sedans, with a new hybrid technology to enhance competitiveness [3]. - The Zeekr brand will focus on increasing its smart technology offerings, planning to release three new models in 2025 [3]. - Lynk & Co aims to upgrade its existing products and introduce two new hybrid models in the second and third quarters of 2025 [3].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 14.82 HKD, corresponding to a PE ratio of 9/11/8 for the years 2024-2026 [3][18]. Core Insights - The company achieved a total wholesale sales volume of 210,000 units in December, representing a year-on-year increase of 43% and a full-year total of 2.177 million units, up 32% year-on-year. The new energy vehicle (NEV) sales reached 111,206 units in December, up 84% year-on-year, with a penetration rate of 52.9% [3]. - For 2025, the company targets a sales volume of 2.71 million units, with a projected year-on-year growth of approximately 25%. The NEV sales target is set at 1.5 million units, expecting a year-on-year growth of about 69% [3]. - The launch of the GEA architecture's first plug-in hybrid product, the Galaxy Starship 7, is expected to enhance the company's market share in the NEV segment, with initial delivery volumes exceeding 10,000 units within 13 days of launch [3]. - The company has increased its stake in Zeekr and gained control over Lynk & Co, which is anticipated to improve internal resource integration and operational efficiency [3]. Financial Summary - Revenue projections for 2024-2026 are 224.78 billion, 277.69 billion, and 308.83 billion CNY, respectively. Net profit estimates are 16.04 billion, 12.58 billion, and 16.32 billion CNY for the same period [2][3]. - The company’s earnings per share (EPS) are forecasted at 1.59, 1.25, and 1.62 CNY for 2024-2026, respectively [2][3]. - The report highlights a significant increase in net profit growth rate for 2024 at 202.1%, followed by a decrease in 2025 and a recovery in 2026 [2].

Group 1 - The board has set a sales target of 2.71 million vehicles for 2025, representing an approximate 25% increase compared to the total sales achieved in 2024 [1] - In a recent announcement, Geely Automobile reported a December 2024 sales figure of 210,100 vehicles, marking a year-on-year growth of approximately 43% [2] - The cumulative sales for Geely in 2024 reached 2.1766 million vehicles, reflecting a year-on-year increase of 32% [2]

Summary of Conference Call Records Company and Industry Overview - The conference call discusses the automotive industry, specifically focusing on the company Geely and its product strategies, including new vehicle launches and market positioning. Key Points and Arguments 1. Geely is experiencing its strongest new product cycle, with a comprehensive strategy targeting price ranges from 100,000 to 500,000 RMB, aiming to compete with brands like BRD [1] 2. The Galaxy brand is introducing new models based on the GA architecture, featuring the new generation of powertrains, emphasizing large space, low fuel consumption, and high cost-performance ratio [1] 3. The Galaxy L6 and L7 models have seen significant improvements in fuel efficiency, with L7's consumption decreasing from 5.23 L/100km last year to 4.9 L/100km this year, and L6's from 4.55 L/100km to 3.95 L/100km, representing a reduction of over 10% [3] 4. The Galaxy E8 will be updated next year to include a hybrid version alongside its existing electric variant, targeting competition with BYD's Han series, which has a combined sales volume of approximately 20,000 to 30,000 units [2] 5. The upcoming EX11 and DX11 SUVs are expected to be priced around 400,000 RMB and 300,000 RMB respectively, both featuring hybrid versions and advanced self-driving capabilities [4] 6. The Lynk & Co brand is set to launch the L946, a large 6-seater vehicle priced between 300,000 to 400,000 RMB, built on the new SPA 2.0 architecture, which offers improved space utilization compared to previous models [5][6] 7. The L946 may feature a 50 kWh battery and a tri-motor system for rear-wheel steering, enhancing its performance and appeal in the market [6] Additional Important Information - The conference highlights the competitive landscape in the automotive sector, with Geely's strategic focus on high-end models and hybrid technologies to capture market share against established competitors [5] - The emphasis on fuel efficiency and cost-effectiveness in new models indicates a response to consumer demand for sustainable and economical vehicles [3] - The introduction of multiple new models across different price segments suggests a comprehensive approach to market penetration and brand diversification [1][4]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price based on a PE ratio of 8/10/8 for the years 2024-2026 [5][3]. Core Insights - The company reported strong wholesale sales of 250,000 units in November, a year-on-year increase of 25.0% and a month-on-month increase of 10.3%. Cumulatively, sales from January to November reached 1.967 million units, up 28.4% year-on-year [3]. - New energy vehicle (NEV) sales in November were particularly impressive, totaling 122,453 units, representing an 88.3% year-on-year increase and a 12.6% month-on-month increase, with a penetration rate of 49.0% [3]. - The upcoming launch of the Galaxy Starship 7, the first plug-in hybrid product based on the GEA architecture, is expected to enhance the company's market position in the NEV segment [3]. - The company has increased its stake in Zeekr and gained control over Lynk & Co, which is anticipated to improve internal resource integration and operational efficiency [3]. - The financial forecast for 2024-2026 anticipates revenues of 224.78 billion, 277.69 billion, and 308.83 billion yuan, with net profits of 16.04 billion, 12.58 billion, and 16.32 billion yuan respectively [3][4]. Financial Summary - Projected revenues for 2024, 2025, and 2026 are 224.78 billion, 277.69 billion, and 308.83 billion yuan, with growth rates of 25.4%, 23.5%, and 11.2% respectively [4][18]. - Net profit estimates for the same years are 16.04 billion, 12.58 billion, and 16.32 billion yuan, with corresponding growth rates of 202.1%, -21.5%, and 29.7% [4][18]. - Earnings per share (EPS) are projected to be 1.59, 1.25, and 1.62 yuan for 2024, 2025, and 2026 respectively [4][18].

Investment Rating - The report maintains a "Buy" rating for Geely Automobile, with a target price raised to HKD 19.0, indicating a potential upside of 37% from the current price of HKD 13.9 [4][6]. Core Insights - Geely Automobile's performance exceeded expectations in the first three quarters of 2024, achieving revenue of RMB 167.68 billion, a year-on-year increase of 36%, and a net profit of RMB 13.05 billion, up 358% year-on-year [1][2]. - The growth in performance is attributed to steady sales growth and optimization of the product mix, with cumulative sales from January to October reaching 1.716 million units, a 28.9% increase year-on-year [2][3]. - The introduction of the new generation Raytheon EM-i hybrid technology is expected to accelerate product updates, enhancing fuel efficiency and electric drive efficiency [3]. Financial Performance Summary - For FY2024E, sales revenue is projected to reach RMB 239.34 billion, reflecting a growth rate of 34% [5]. - The net profit for FY2024E is estimated at RMB 15.78 billion, representing a significant increase of 197% compared to FY2023A [5]. - The gross margin for FY2024E is expected to be 15.5%, slightly up from 15.3% in FY2023A [5]. - The average ROE is projected to rise to 17.9% in FY2024E, indicating improved profitability [5]. Strategic Developments - Geely is strategically integrating its brands, with plans to transfer 11.3% of Zeekr Intelligent Technology shares to Geely Automobile, increasing its stake to approximately 62.8% [3]. - The restructuring aims to reduce redundant investments across market segments and enhance collaboration in branding, product development, technology, supply chain, marketing, and international expansion [3].

Investment Rating - The report maintains a "Buy" rating for Geely Automobile [1] Core Views - The Q3 performance of Geely Automobile met market expectations, with a single-quarter revenue of 60.378 billion yuan, reflecting a quarter-on-quarter increase of 20.5% and a year-on-year increase of 9.8%. The net profit for the quarter was 2.455 billion yuan, with a year-on-year increase of 92.4% but a quarter-on-quarter decrease of 72.8% [2][3] - The report highlights the strategic synergy from the merger of brands, which is expected to enhance operational efficiency and reduce competition within the group [4] Financial Performance Summary - Total revenue for Geely in 2022 was 148.565 billion yuan, with projections of 179.846 billion yuan for 2023, 250.809 billion yuan for 2024, 316.050 billion yuan for 2025, and 344.520 billion yuan for 2026, indicating a year-on-year growth rate of 45.63% in 2022 and 39.46% in 2024 [1] - The net profit attributable to shareholders was 5.260 billion yuan in 2022, with forecasts of 5.308 billion yuan for 2023, 16.816 billion yuan for 2024, 13.575 billion yuan for 2025, and 15.988 billion yuan for 2026, showing a significant increase of 216.78% in 2024 [1][4] - The report notes that the earnings per share (EPS) is projected to rise from 0.52 yuan in 2022 to 1.67 yuan in 2024, with a price-to-earnings (P/E) ratio of 7.57 for 2024 [1][4] Sales and Profitability Metrics - In Q3, Geely achieved total sales of 534,000 units, with a year-on-year increase of 18.7% and a quarter-on-quarter increase of 11.3%. The average selling price per vehicle was approximately 130,000 yuan [3] - The gross margin for Q3 2024 was reported at 15.6%, with a slight year-on-year increase of 0.1 percentage points [3] - The report indicates that the net profit per vehicle for Geely brand vehicles was 0.55 thousand yuan, reflecting a year-on-year increase of 76% [3]

Core Viewpoint - Geely Automobile Holdings Ltd. has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates - The Zacks Consensus Estimate for Geely Automobile for the fiscal year ending December 2024 is projected at $4.45 per share, reflecting a 209% increase from the previous year's reported figure [9]. - Over the past three months, the Zacks Consensus Estimate for Geely has risen by 103.9%, indicating a strong upward trend in earnings estimates [9]. Zacks Rating System - The Zacks rating system is based solely on a company's changing earnings picture, which is tracked through EPS estimates from sell-side analysts [2]. - The system classifies stocks into five groups, with Zacks Rank 1 (Strong Buy) to Zacks Rank 5 (Strong Sell), and has shown a strong track record, with Zacks Rank 1 stocks averaging a +25% annual return since 1988 [8]. Market Implications - The upgrade to Zacks Rank 2 places Geely in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [12][11]. - Rising earnings estimates are correlated with stock price movements, as institutional investors often adjust their valuations based on these estimates, leading to buying or selling pressure [5][6].