EBSCN·2024-11-18 01:55Investment Rating - The report maintains a "Buy" rating for Geely Automobile (0175.HK) [4] Core Views - Geely's total revenue for the first three quarters of 2024 increased by 36.0% year-on-year to RMB 167.68 billion, with net profit attributable to shareholders rising by 358% to RMB 13.05 billion [1] - The company has announced a merger between Lynk & Co and Zeekr, aiming to optimize its equity structure and accelerate internal restructuring [3] - The gross margin for the first three quarters of 2024 improved by 0.5 percentage points to 15.3%, with a notable reduction in SG&A expense ratio [2] Summary by Sections Financial Performance - In Q3 2024, total revenue reached RMB 60.38 billion, up 20.5% year-on-year and 9.8% quarter-on-quarter, while net profit attributable to shareholders was RMB 2.46 billion, a 92% increase year-on-year but a 73% decrease quarter-on-quarter [1] - The ASP (average selling price) per vehicle, excluding Lynk & Co, increased by 2.8% quarter-on-quarter to RMB 111,000 [1] Cost Management and Profitability - The gross margin for Q3 2024 was 15.6%, reflecting a slight year-on-year increase but a decrease from the previous quarter [2] - The SG&A expense ratio decreased by 1.3 percentage points year-on-year to 11.6% for the first three quarters of 2024, with a more significant reduction in Q3 [2] Strategic Developments - The merger of Lynk & Co into Zeekr is part of a broader strategy to enhance resource integration and platform-based operations, which is expected to improve profitability [3] - The report anticipates that the restructuring will lead to a clearer product matrix and enhanced competitive advantages in the market [3] Future Outlook - The profit forecasts for 2024 to 2026 have been revised upward by 3.8%, 23.7%, and 26.2% respectively, with a target price adjustment to HK$18.08, corresponding to a 13.5x PE for 2025 [4]