GEELY AUTO(00175) 华创证券·2024-11-15 07:50Investment Rating - Strong Buy (Maintained) with a target price range of HKD 21.9-24.8 [1] Core Views - The company's Q3 2024 performance exceeded expectations, with revenue reaching RMB 60.4 billion, a 20% YoY increase, and net profit attributable to shareholders of RMB 2.455 billion, a 92% YoY increase [1] - The company plans to increase its stake in Zeekr to 62.8% through the acquisition of shares held by its parent company, and Zeekr intends to acquire Lynk & Co shares from Geely Holding and Volvo to achieve a 51% controlling stake and consolidation [1] - The Geely brand's performance in Q3 2024 was strong, with sales of 410,000 units, a 15% YoY increase, and net profit of RMB 2.62 billion, an 81% YoY increase, driven by the success of the Galaxy E5 and improved profitability in the Galaxy series [2] - Zeekr's performance remained stable, with sales of 55,000 units in Q3 2024, a 51% YoY increase, and a net profit of RMB 10 million, turning profitable compared to the previous quarter [2] - The company's strategic integration of internal resources, including the consolidation of Lynk & Co by Zeekr, is expected to streamline operations and improve efficiency in high-end brand management, product lines, and R&D [2] - The company is expected to see rapid growth in sales and operating performance in the next two years, driven by its successful new product cycle and global expansion, with projected sales of 2.15 million, 2.56 million, and 2.89 million units for 2024-2026, with new energy vehicle penetration rates of 40%, 54%, and 62% respectively [2] - The company's net profit attributable to shareholders for 2024-2026 is forecasted to be RMB 16 billion, RMB 13.6 billion, and RMB 17.5 billion, with corresponding P/E ratios of 8.1x, 9.5x, and 7.4x [2] Financial Highlights - Q3 2024 revenue: RMB 60.4 billion, +20% YoY [1] - Q3 2024 net profit attributable to shareholders: RMB 2.455 billion, +92% YoY [1] - Geely brand Q3 2024 sales: 410,000 units, +15% YoY, net profit: RMB 2.62 billion, +81% YoY [2] - Zeekr Q3 2024 sales: 55,000 units, +51% YoY, net profit: RMB 10 million [2] - 2024-2026 projected sales: 2.15 million, 2.56 million, and 2.89 million units, with new energy vehicle penetration rates of 40%, 54%, and 62% respectively [2] - 2024-2026 projected net profit attributable to shareholders: RMB 16 billion, RMB 13.6 billion, and RMB 17.5 billion [2] Strategic Integration - The company is undergoing significant internal resource integration, including the consolidation of Lynk & Co by Zeekr, which is expected to streamline operations and improve efficiency in high-end brand management, product lines, and R&D [2] - The integration is expected to resolve past issues of resource redundancy and overlap, leading to more effective management of the company's high-end brands and product lines [2] Future Outlook - The company is expected to see rapid growth in sales and operating performance in the next two years, driven by its successful new product cycle and global expansion [2] - The company's strategic integration of internal resources is expected to create synergies and improve future performance [2] - The company's focus on global operations, self-developed intelligent driving, in-car systems, and chips is expected to strengthen its competitive position in key growth areas such as overseas markets and intelligent capabilities [2]