Zhi Tong Cai Jing·2025-08-15 02:02Core Viewpoint - The report from CICC maintains the profit forecast for Geely Auto (00175) for 2025 and 2026, with a target price of HKD 26.00, indicating a potential upside of 37.2% from the current stock price [1] Group 1: Sales and Revenue Growth - In 1H25, Geely Auto achieved total sales of 1.409 million units, a year-on-year increase of 47%, driving total revenue to CNY 150.29 billion, up 40% year-on-year [2] - The sales of new energy vehicles (NEVs) surged by 126% to 725,000 units, accounting for 51.5% of total sales, with the Galaxy brand's sales increasing by 232% to 548,000 units [2] - NEV exports also performed well, rising by 146% to 40,000 units, and the company plans to launch six new models in the second half of the year to push annual sales beyond 3 million units [2] Group 2: Profitability and R&D Investment - The gross profit margin in 1H25 was 16.4%, with the GEA architecture models enhancing profitability and offsetting some pricing pressures [3] - The company reduced its sales and management expense ratios by 1.1 percentage points and 0.7 percentage points to 5.6% and 1.9%, respectively [3] - R&D investment increased by 21.3% to CNY 7.33 billion, focusing on advanced driving assistance systems and new architecture development, with core operating profit showing a 102% year-on-year increase to CNY 6.66 billion [3] Group 3: Strategic Reconfiguration and Globalization - Geely is accelerating its "One Geely" strategy for brand integration, enhancing resource synergy across multiple brands [4] - The company is expanding globally by investing in Renault Brazil to leverage its production and distribution network in the Latin American market, while also launching production in Egypt and trial operations in Indonesia to strengthen local supply chains [4] - The product strategy emphasizes full-scale intelligence, with new models featuring advanced driving solutions set to cover the market from entry-level to luxury segments [4]