GEELY AUTO(HK:00175) Changjiang Securities·2024-11-25 07:04Investment Rating - Buy rating maintained for Geely Automobile (0175 HK) [10] Core Views - Geely Automobile's Q3 2024 performance showed strong growth with revenue reaching 1676 8 billion yuan, up 36 0% YoY, and net profit attributable to shareholders surging 358 5% YoY to 130 53 billion yuan [6] - The company's new energy vehicle (NEV) transformation is accelerating, with NEV sales accounting for over 50% of domestic market penetration in Q3 [6] - The integration of Zeekr and Lynk & Co is expected to optimize brand structure and enhance internal resource synergy [8] - Geely's GEA architecture supports a new product cycle, with Zeekr, Lynk & Co, and Galaxy brands performing well [8] Financial Performance - Q3 2024 revenue reached 603 8 billion yuan, up 20 5% YoY and 9 8% QoQ, marking a record high for single-quarter revenue [6] - Q3 2024 net profit attributable to shareholders was 24 6 billion yuan, up 92 4% YoY and 78 4% QoQ [7] - Gross margin improved to 15 6% in Q3, with further optimization in expense ratios [7] Brand Performance - Zeekr achieved sales of 55,000 units in Q3, up 51% YoY, with revenue reaching 18 36 billion yuan, a 31% YoY increase [7] - Lynk & Co and Zeekr's integration is expected to reduce related-party transactions and eliminate competition, enhancing resource synergy [8] Strategic Developments - Geely Group plans to transfer 11 3% of Zeekr shares to Geely Automobile, increasing its stake to approximately 62 8% [8] - Zeekr will acquire 51% of Lynk & Co, with 30% of the shares purchased from Volvo Group for 5 4 billion yuan [8] - The transaction is expected to be completed by Q1 2025, further solidifying Geely's strategic focus [8] Valuation and Outlook - Geely Automobile's current valuation remains low, with expected net profits of 160 billion, 118 billion, and 157 billion yuan for 2024-2026, respectively [8] - The company's PE ratios for 2024-2026 are projected at 7 7X, 10 5X, and 7 9X, indicating potential upside [8]