GEELY AUTO(00175) Huachuang Securities·2025-05-16 14:37Investment Rating - The report maintains a "Strong Buy" rating for Geely Automobile, expecting it to outperform the benchmark index by over 20% in the next six months [6][19]. Core Views - Geely Automobile reported excellent performance in Q1 2025, achieving revenue of 72.5 billion yuan, a year-on-year increase of 25%, and a net profit of 5.7 billion yuan, up 41 million yuan year-on-year [2][9]. - The company is restructuring its organizational framework to enhance management efficiency and synergy under the "One Geely" strategy, following the acquisition of Zeekr Technology [4][9]. - The electric and intelligent transformation is progressing, with new models set to launch in 2025, and the integration of its four major brands is expected to reduce costs and increase efficiency [9]. Financial Performance Summary - Revenue and Profitability: In Q1 2025, Geely sold 700,000 vehicles, a 48% increase year-on-year, leading to a revenue of 72.5 billion yuan. The gross margin was 15.8%, with a net profit of 5.7 billion yuan, reflecting a significant improvement [9]. - Future Projections: The report forecasts total sales of 2.74 million, 3.24 million, and 3.75 million vehicles for 2025-2027, with corresponding revenues of 336.4 billion, 442.0 billion, and 514.2 billion yuan, respectively [9][10]. - Earnings Per Share (EPS): Expected EPS for 2025 is 1.47 yuan, with a projected PE ratio of 12.4 times [5][10]. Market Position and Valuation - The target price range for Geely is set between 23.89 and 28.66 HKD, with a potential upside of 21% to 45% based on historical valuation levels and recent market performance [6][9]. - The company's total market capitalization is approximately 198.94 billion HKD, with a current share price of 19.74 HKD [6][10].