GEELY AUTO-吉利汽车：3Q24 NEV sales and profits pave way for FY25

Investment Rating - Maintain BUY rating with a target price increase from HK $14.00 to HK$ 19.00, representing a 36.7% upside from the current price of HK $13.90 [2][5]. Core Insights - Geely Automobile's 3Q24 NEV sales and profitability are strong, with expectations for continued momentum into FY25, leading to significant core profit growth [2]. - 3Q24 operating profit of RMB3.0 billion exceeded estimates by 13%, despite a slight revenue miss of 2% compared to prior forecasts [2]. - The company has raised its FY25E sales volume forecast by 18% to 2.38 million units, driven by positive reception of new NEV models [2]. Financial Performance Summary - 3Q24 revenue was RMB60.4 billion, with a gross profit margin (GPM) of 15.6%, slightly improved from 15.5% in FY24E [2][10]. - The net profit forecast for FY25E has been revised up by 43% to RMB12.4 billion, reflecting strong NEV performance and cost control measures [2][7]. - The company reported a net profit of RMB2.45 billion in 3Q24, which was largely in line with previous forecasts, excluding an impairment loss of RMB2.76 billion from Lynk & Co [2][10]. Sales and Production Outlook - NEV sales volume is projected to surge by 51% year-on-year to 1.32 million units in FY25E, constituting 55% of total sales volume [2]. - The sales volume for Geely increased by 15.8% year-on-year in 3Q24, with a total of 533,960 units sold [6][10]. Valuation Metrics - Zeekr is valued at 0.7x the revised FY25 core revenue, implying a valuation of US$ 8.3 billion [2]. - Geely's other businesses are valued at 12x FY25E P/E, supporting the overall target price increase [2][9]. Earnings Revision - Revenue estimates for FY25E have been raised to RMB276.93 billion, reflecting a 5.8% increase from previous estimates [7][8]. - The gross profit for FY25E is projected at RMB43.08 billion, with a gross margin of 15.6% [7][8].