GEELY AUTO(00175)2024-04-25 22:26Financial Performance - Revenue for 2023 reached RMB 179.2 billion, a 21% increase compared to RMB 147.96 billion in 2022[5][7] - Net profit attributable to equity holders of the company increased by 1% to RMB 5.31 billion in 2023 from RMB 5.26 billion in 2022[5][7] - Total assets grew by 22% to RMB 192.6 billion in 2023 from RMB 157.83 billion in 2022[5][7] - Total equity attributable to equity holders of the company increased by 7% to RMB 80.51 billion in 2023 from RMB 75.13 billion in 2022[5][7] - Basic earnings per share increased by 1% to RMB 51.36 cents in 2023 from RMB 51.06 cents in 2022[7] - Total revenue in 2023 increased by 21% to RMB 179.2 billion, with net profit reaching RMB 4.94 billion, up 6% year-on-year[11] - The gross profit margin increased by 1.2 percentage points to 15.3% in 2023, driven by cost reductions and product structure improvements[11] - Geely's net profit attributable to shareholders in 2023 was RMB 5.31 billion, a 51% increase compared to 2022 excluding one-time gains[18] - Government subsidies in 2023 increased by 196% to RMB 960 million, supporting Geely's operations[19] - Geely's R&D costs significantly increased in 2023, leading to a 54% reduction in tax expenses due to additional deductible amounts[19] - Operating cash flow reached RMB 22.3 billion in 2023, driven by increased sales volume and improved gross margin[29] - Total capital expenditure for 2023 was RMB 15.3 billion, exceeding the initial budget of RMB 14 billion due to accelerated R&D in new energy and intelligent transformation[29] - Total cash level (including bank balances, cash, and restricted bank deposits) increased by 13% year-over-year to RMB 37.96 billion at the end of 2023[29] - Total borrowings decreased by 44% to RMB 6.1 billion at the end of 2023[29] - Net cash on hand (total cash level minus total borrowings and perpetual capital securities) increased to RMB 28.4 billion at the end of 2023, up from RMB 26.1 billion six months prior[29] - R&D expenses for 2023 totaled RMB 7.81 billion, a 15% increase compared to 2022[33][34] - The company's distributable reserves attributable to equity holders amounted to RMB 15,820,599,000 as of December 31, 2023, an increase from RMB 13,343,505,000 in 2022[151] - The proposed final dividend for 2023 is HKD 0.22 per ordinary share, totaling RMB 2,033,286,000, compared to HKD 0.21 per share and RMB 1,866,554,000 in 2022[151] Sales and Market Performance - The company achieved record-high total sales and new energy vehicle sales in 2023[9] - Total vehicle sales in 2023 reached a record high of 1,686,516 units, a year-on-year increase of 18%, with domestic wholesale sales up 14% to 1,412,415 units and export wholesale sales up 38% to 274,101 units[10] - New energy vehicle (NEV) sales in 2023 reached 487,461 units, a year-on-year increase of 48%, accounting for 29% of total sales[10] - The "Galaxy" series, launched in March 2023, achieved a monthly average sales volume exceeding 10,000 units for six consecutive months, with two plug-in hybrid models and one pure electric model introduced[10] - The luxury NEV brand "Zeekr" delivered 118,685 units in 2023, a year-on-year increase of 65%[10] - Total vehicle sales in 2023 reached 1,686,516 units, an 18% year-over-year increase, setting a new annual sales record[36] - New energy vehicle sales in 2023 reached 487,461 units, a 48% year-over-year increase[36] - The premium smart pure electric brand Zeekr delivered 118,685 vehicles in 2023, a 65% year-over-year increase[36] - The Galaxy series, launched in March 2023, achieved cumulative sales of over 83,000 units within the year[36] - Geely's global high-end brand Lynk & Co achieved annual sales of 220,250 units in 2023, a year-on-year increase of over 22%, making it the fastest Chinese high-end car brand to surpass 1 million units[37] - Geely's total vehicle sales in 2023 reached 1,686,516 units, compared to 1,432,988 units in 2022, representing a growth of approximately 17.7%[38] - The average pre-tax ex-factory price in 2023 was RMB 108,387, slightly lower than RMB 108,392 in 2022 but significantly higher than RMB 87,672 in 2021[39] - Geely's total annual production capacity across its factories reached 2,000,000 units in 2023, with key models including the Galaxy L7, Galaxy E8, and Lynk & Co 07 EM-P[40] - Geely plans to launch multiple new energy vehicle models in 2024, including pure electric and plug-in hybrid SUVs, leveraging the SEA and CMA Evo architectures[41] - The Zeekr brand delivered 118,685 vehicles in 2023, a 65% year-on-year increase, with cumulative deliveries surpassing 190,000 units by the end of 2023[44] - Geely's new energy technology ecosystem, including the 800V ultra-fast charging "Golden Brick Battery" and the EM-P super range-extended electric solution, was launched in 2023[37] - Geely expanded its sales network in China in 2023, with 517 new Galaxy stores, 24 Zeekr Centers, and 350 Lynk & Co Centers[37] - The company's intelligent driving and connectivity technologies, such as the Flyme Auto OS and the Xingrui Intelligent Computing Center, achieved significant breakthroughs in 2023[37] - Geely's satellite communication technology was globally mass-produced for the first time, applied in models like the Zeekr 001 FR and Galaxy E8[37] - ZEEKR 001 became the fastest luxury car to exceed 100,000 deliveries globally and maintained its position as the sales champion among Chinese brand pure electric vehicles priced above 300,000 RMB[45] - ZEEKR's global direct sales stores reached 342 by the end of 2023, with 340 in 79 Chinese cities and 7 ZEEKR Center stores winning 18 international design awards[45] - ZEEKR Energy built 882 charging stations in 137 cities, with its 800V ultra-fast charging network being the most extensive in the industry[45] - ZEEKR recorded a net loss of approximately 1.135 billion RMB for the year ended December 31, 2023[46] - Lynk & Co achieved a 22.3% year-on-year sales growth in 2023, reaching 220,250 vehicles, with cumulative sales surpassing 1 million units[47] - Lynk & Co's new energy vehicle sales increased by 60.1% to 63,000 units, accounting for 28.5% of total sales[47] - Lynk & Co's cumulative subscription volume in Europe exceeded 38,000 units by the end of 2023[47] - Geely Auto Finance's new car loan volume reached 594,000 in 2023, a 10% year-on-year increase, with new energy vehicle loans accounting for over 33% of total retail loans[50] - Geely Auto Finance's loan balance grew by 4% year-on-year to 54.47 billion RMB, with a non-performing loan ratio improving to 0.22%[50] - Geely Auto successfully issued 5 asset-backed securities (ABS) totaling over RMB 23 billion in 2023, including the first revolving green ABS in China's auto finance industry[51] - Geely's total export sales in 2023 reached 274,101 vehicles, a year-on-year increase of over 38%[52] - Geely expanded its global presence with 533 sales and service outlets in 70 countries by the end of 2023[52] - Geely's joint venture Proton achieved annual sales of 154,000 vehicles in 2023, a 6% year-on-year increase, contributing RMB 116 million to Geely's performance[53] - Geely's joint venture Renault Korea achieved annual sales of 104,000 vehicles in 2023, with 82,000 units exported, contributing RMB 169 million to Geely's performance[53] - Geely generated RMB 8.1 billion in revenue from R&D and technical support services provided to global brands including Renault Korea and Proton in 2023[53] - Geely set a 2024 sales target of 1.9 million vehicles, representing a 13% increase compared to 2023[55] Corporate Governance and Leadership - The company's MSCI ESG rating was upgraded to "AA" in 2023, and it was included in the Hang Seng Corporate Sustainability Index[12] - Geely Automobile Holdings Limited maintained high standards of corporate governance in 2023, adhering to the Corporate Governance Code of the Hong Kong Stock Exchange, except for Code Provisions C.2.7 and F.2.2[69] - The Board of Directors consists of members with extensive experience in the automotive industry, business management, and capital market operations, ensuring diverse perspectives for effective decision-making[70] - Li Shufu, Chairman and Executive Director, has been guiding the overall corporate strategy and governance since his appointment on June 9, 2005, and was last re-elected on May 25, 2023[72] - An Conghui, Executive Director and Chairman of the Sustainability Committee, oversees the group's operations and risk management in China, appointed on December 30, 2011, and last re-elected on May 25, 2023[72] - Wei Mei, Executive Director and former member of the Remuneration Committee, supervises the group's operational management, digitalization, and IT-related work, appointed on January 17, 2011, and last re-elected on May 25, 2023[72] - Newly appointed Independent Non-Executive Directors Yu Liping and Zhu Hansong received comprehensive induction training upon their appointments on October 9, 2023, to ensure they understand their responsibilities[74] - Directors are required to annually disclose and update their positions in public companies or organizations, with any changes reflected in their profiles and disclosed on the company's website, interim reports, and annual reports[75] - Independent Non-Executive Directors have provided constructive and well-founded opinions on the company's strategy and policy development, with the Board reviewing their disclosures, confirmations, and actual time commitment[75] - The company provided continuous professional development (CPD) courses for directors, focusing on their roles, responsibilities, and compliance with ESG disclosure requirements[76] - Directors received timely and comprehensive information, including monthly management accounts and sales reports, to support informed decision-making[77] - The company adopted a standard code for securities transactions by directors and senior management, with no reported non-compliance cases in 2023[78] - Senior management shareholdings as of December 31, 2023, include: Dai Qing (343,793 shares), Zhang Songren (114,125 shares), Pan Zhijie (45,650 shares), and Zhao Yang (520,462 shares)[79] - The company implemented a policy for handling insider information, ensuring timely disclosure and confidentiality in compliance with listing rules[79] - The board reviewed corporate governance policies, including whistleblowing, remuneration, and anti-corruption policies, and monitored compliance with the standard code[82] - The board delegated strategic execution and daily operations to the CEO-led management team, retaining approval rights for significant transactions and investments[83] - The board consists of 7 executive directors and 5 independent non-executive directors, with at least one independent director possessing professional accounting or financial management expertise[84] - Directors are appointed for a maximum term of three years and must retire and seek re-election at least every three years at the company's general meeting[86] - The company held a total of 5 regular board meetings, 12 special board meetings, 1 executive committee meeting, 4 audit committee meetings, 7 remuneration committee meetings, 4 nomination committee meetings, 5 sustainability committee meetings, 1 annual general meeting, and 5 extraordinary general meetings during the fiscal year ending December 31, 2023[87] - Chairman Li Shufu attended 5/5 regular board meetings and 12/12 special board meetings, while CEO Gui Shengyue attended 5/5 regular board meetings, 12/12 special board meetings, and 1/1 executive committee meeting[88] - Independent non-executive directors confirmed their independence and compliance with the Listing Rules, with no conflicts of interest affecting their roles[90] - The Chairman and CEO roles are separated, with Li Shufu as Chairman and Gui Shengyue as CEO, ensuring balanced power distribution[91] - The company has established five board committees: Executive Committee, Remuneration Committee, Nomination Committee, Audit Committee, and Sustainability Committee[92] - The Executive Committee held one meeting during the year and approved the issuance and allotment of new shares following the vesting of restricted share awards[93] - The Remuneration Committee held seven meetings and reviewed the monthly base salary, benefits, and year-end bonuses of executive directors based on their contributions, experience, and market conditions[96] - The total remuneration for senior management in 2023 was RMB 21,481 thousand, including base salary and allowances (RMB 4,636 thousand), retirement benefits and plan contributions (RMB 81 thousand), and share-based payment expenses (RMB 16,764 thousand)[99] - The Remuneration Committee adopted a diversified remuneration structure, including short-term (monthly base salary and discretionary year-end bonuses) and long-term incentives (share option schemes, share award schemes, and retirement benefits)[97] - The Nomination Committee held four meetings and reviewed the board's composition, diversity policy, and the independence of five incumbent independent non-executive directors[101] - The company currently has three female directors, accounting for approximately 25% of the board members, with a target to increase the proportion of female directors to 30% or above by the end of 2025[106] - The company has implemented flexible board arrangements, such as virtual board meetings and flexible meeting schedules, to encourage work-life balance and support the development of board members, including women[106] - The company provides governance training and skill development opportunities to help potential female directors acquire the necessary skills and experience for board service[106] - The company uses objective criteria such as skills, experience, qualifications, and background to select board members, ensuring fair consideration for women and reducing bias[106] - The board has five independent non-executive directors, accounting for more than one-third of the board, ensuring independent perspectives and opinions are provided[107] - The audit committee held four meetings during the year, reviewing the group's audited annual results for 2022 and interim results for 2023, among other matters[110] - The audit committee evaluated the independence and objectivity of the external auditors and approved the annual audit fees for the year ending December 31, 2023[110] - The audit committee reviewed the results of internal audits conducted by the internal audit department and assessed the effectiveness of the group's risk management and internal control systems[110] - The company's risk management and internal control systems were confirmed to be effective and adequate for the year ended December 31, 2023, with considerations including resource adequacy, employee qualifications, and ESG performance[112] - The company follows the "Three Lines of Defense" model and adheres to the COSO framework and China's internal control standards for its risk management and internal control systems[112] - The internal audit department reviews major internal control areas, including financial, operational, and compliance controls, and reports to the audit committee at least twice a year without management presence[113] - The company has a policy for handling and disclosing insider information, with relevant department heads and management implementing the process monthly and as needed[113] - The Sustainability Committee held five meetings in the year, reviewing ESG performance, risks, and opportunities, and approved revisions to the ESG strategy and anti-corruption systems[115] - The company voluntarily publishes monthly sales data since January 2010 to enhance information transparency[116] - The company's long-term strategy includes expanding sales and production capacity, increasing product variety, focusing on quality and customer satisfaction, and achieving carbon neutrality[117] - The board reviews the effectiveness of the company's risk management and internal control systems annually and ensures financial statements are prepared on a going concern basis[118] - The total fees paid to the external auditor, Grant Thornton (Hong Kong) CPA Limited, for audit and non-audit services in 2023 amounted to RMB 8,072 thousand, with audit services costing RMB 7,192 thousand and non-audit services costing RMB 880 thousand[120] - The company's shareholder communication policy was revised in 2023 to enhance transparency and maintain positive relationships with stakeholders, following a comprehensive review and feedback collection[122] - The company secretary completed over 15 hours of professional training in 2023 and plays a crucial role in ensuring compliance with legal and regulatory requirements, as well as facilitating effective board decision-making[123] - Shareholders holding at least 10% of the company's voting rights can request a special general meeting, with specific conditions outlined for the process[124] - The company's investor relations department, led by Executive Director Mr. Hung Siu Lun, is authorized to handle shareholder inquiries and report them to the board for discussion[125] - The 2023 Annual General Meeting (AGM) was held on May 25, 2023, with one executive director and the external auditor attending in person, while three independent non-executive directors and four executive directors participated via teleconference[126] - The company will send meeting notices at least 21 full days before the Annual General Meeting and Extraordinary General Meetings for special resolutions, and at least 14 full days before other Extraordinary General Meetings[127] - The company may declare dividends in any currency at shareholder meetings, subject to the Cayman Islands Companies Law, and the amount declared shall not exceed the Board's recommended amount[128] - The Board may declare interim dividends without convening a shareholder meeting, and may pay dividends at fixed rates semi-annually or at other intervals as determined by the Board[129] - The company's website and the Hong Kong Exchanges and Clearing Limited website