Investment Rating - The report assigns a "Buy" rating for the company, indicating a potential upside in the stock price [6][7]. Core Insights - The company reported significant growth in Q1 2025, with revenue reaching 72.495 billion RMB, a year-on-year increase of 24.5%, and a net profit of 5.67 billion RMB, up 264% year-on-year, exceeding expectations [7][9]. - The company is accelerating its electric vehicle transformation, with a notable increase in sales of its new energy vehicle brands, which accounted for 48.2% of total sales in Q1, up 18 percentage points year-on-year [9]. - The company is pursuing a strategic integration of its automotive business, including a proposed privatization of its brand Zeekr, which is expected to enhance operational efficiency and reduce costs [9]. Summary by Sections Company Overview - The company operates in the automotive industry, with a current H-share price of 19.24 HKD and a market capitalization of approximately 135.241 billion RMB [2]. Recent Performance - In Q1 2025, the company sold 703,800 vehicles, a 48% increase year-on-year, with new energy vehicle sales rising by 135% [9]. - The overall gross margin for Q1 was 15.8%, reflecting a slight improvement [9]. Financial Projections - Expected net profits for 2025, 2026, and 2027 are projected to be 13.2 billion RMB, 17.6 billion RMB, and 21.8 billion RMB, respectively, with year-on-year growth rates of 44%, 30%, and 24% [7][9]. - The earnings per share (EPS) for the same years are forecasted to be 1.35 RMB, 1.75 RMB, and 2.2 RMB, with corresponding price-to-earnings (P/E) ratios of 13, 10, and 8 [7][9].

Investment Rating - The report assigns a "Buy" rating for the company, indicating a potential upside in the stock price [6][7]. Core Insights - The company reported significant growth in Q1 2025, with revenue reaching 72.495 billion RMB, a year-on-year increase of 24.5%, and a net profit of 5.67 billion RMB, up 264% year-on-year, exceeding expectations [7][9]. - The company is accelerating its electric vehicle transformation, with a notable increase in sales of its new energy vehicle brands, which accounted for 48.2% of total sales in Q1, up 18 percentage points year-on-year [9]. - The company is pursuing a strategic integration of its automotive business, including a plan to privatize its brand Zeekr, which is expected to enhance operational efficiency and reduce costs [9]. Summary by Sections Company Overview - The company operates in the automotive industry, with a current H-share price of 19.24 HKD and a market capitalization of approximately 135.241 billion RMB [2]. Recent Performance - In Q1 2025, the company sold 703,800 vehicles, a 48% increase year-on-year, with new energy vehicle sales rising by 135% [9]. - The overall gross margin for Q1 was 15.8%, reflecting a slight improvement [9]. Financial Projections - Expected net profits for 2025, 2026, and 2027 are projected to be 13.2 billion RMB, 17.6 billion RMB, and 21.8 billion RMB, respectively, with year-on-year growth rates of 44%, 30%, and 24% [7][9]. - The earnings per share (EPS) for the same years are forecasted at 1.35 RMB, 1.75 RMB, and 2.2 RMB, with corresponding price-to-earnings (P/E) ratios of 13, 10, and 8 [7][9]. Strategic Initiatives - The company is focusing on integrating its automotive operations to improve quality and efficiency, with an anticipated overall benefit exceeding 5% post-integration [9].

Investment Rating - The investment rating for the company is "Buy" (maintained) [2][9] Core Views - The company reported strong performance in Q1 2025, with revenue of 72.495 billion yuan, a year-on-year increase of 24.5%, and a net profit attributable to shareholders of 5.672 billion yuan, up 263.6% year-on-year [3][6] - The "One Geely" plan is progressing smoothly, with significant growth in the Galaxy brand's sales contributing to overall revenue growth [6] Financial Performance Summary - Revenue projections for the company are as follows: - 2023A: 179.846 billion yuan - 2024A: 240.194 billion yuan - 2025E: 318.690 billion yuan - 2026E: 383.448 billion yuan - 2027E: 430.228 billion yuan - Year-on-year growth rates are projected at 21%, 34%, 33%, 20%, and 12% respectively [2] - Net profit attributable to shareholders is forecasted as: - 2023A: 5.166 billion yuan - 2024A: 16.632 billion yuan - 2025E: 13.385 billion yuan - 2026E: 16.763 billion yuan - 2027E: 19.556 billion yuan - Year-on-year growth rates are projected at 1%, 222%, -20%, 25%, and 17% respectively [2] - Earnings per share (EPS) estimates are: - 2023A: 0.51 yuan - 2024A: 1.65 yuan - 2025E: 1.33 yuan - 2026E: 1.66 yuan - 2027E: 1.94 yuan [2] Sales and Profitability - In Q1 2025, the company achieved a gross margin of 15.78%, an increase of 0.15 percentage points year-on-year, while the expense ratio decreased by 2.61 percentage points to approximately 11.55% [6] - The Galaxy brand's sales reached 260,000 units in Q1 2025, showing a year-on-year increase of 574.1% [6] Market Position and Future Outlook - The company is actively pursuing the privatization of Zeekr to enhance operational efficiency and cost reduction [6] - Upcoming model launches, such as the Lynk 900 and Starry 8, are expected to contribute positively to sales in Q2 2025 [6] - The company maintains a positive outlook on revenue and profit growth, with projected revenues of 318.69 billion yuan, 383.45 billion yuan, and 430.23 billion yuan for 2025, 2026, and 2027 respectively [6]

Core Viewpoint - Company is expected to benefit from the integration and release of profit elasticity, leading to an upward revision of net profit estimates for 2025 and 2026 by 15.5% and 6.1% to 16.2 billion and 17.6 billion CNY respectively, with a target price increase of 23.5% to 26.00 HKD, indicating a potential upside of 31.7% from the current stock price [1] Group 1: Financial Performance - In Q1 2025, the company achieved revenue of 72.5 billion CNY, a year-on-year increase of 25%, and a net profit attributable to shareholders of 5.67 billion CNY, a significant year-on-year increase of 264%, aligning with the bank's expectations [2] - The revenue growth was driven by strong sales and the consolidation of Lynk & Co, with passenger vehicle sales increasing by 48% year-on-year to 703,800 units, including 339,000 units of new energy vehicles, which accounted for over 50% of total sales [3] Group 2: Profitability Improvement - The company's gross margin improved by 0.2 percentage points year-on-year to 15.8%, attributed to the scale effects of the new energy business and the GEA modular architecture reducing manufacturing costs [4] - The integration of Lynk & Co and Zeekr has led to enhanced cost control, with selling and administrative expense ratios decreasing by 2.1 percentage points and 0.6 percentage points to 5.0% and 1.9% respectively [4] Group 3: Strategic Initiatives - The "One Geely" strategy has accelerated brand integration and resource focus, showing initial effects in Q1 2025, with clearer brand positioning and significant scale effects in supply chain and production capacity [5] - The company is establishing a competitive advantage in global markets, particularly in the Middle East and Asia-Pacific, while leveraging brand synergies with Lynk & Co, Zeekr, and Volvo to penetrate the European market [5]

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]