GEELY AUTO(00175) HTSC·2025-05-18 10:45Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 29.65 [7][12]. Core Views - The company reported Q1 revenue of RMB 72.5 billion, a year-on-year increase of 25%, and a net profit attributable to shareholders of RMB 5.7 billion, up 264% year-on-year, aligning with expectations [1][5]. - The company is expected to benefit from the new car cycle driven by the GEA platform, with strong sales of new models like the Xingyao 8, which is projected to sell over 8,000 units monthly [4][12]. - The proposed privatization of Zeekr by Geely aims to enhance internal integration and reduce inefficiencies, potentially increasing group efficiency by over 5% and improving R&D and management efficiency by 15-20% [3][12]. Financial Performance - In Q1 2025, the company sold 700,000 new vehicles, a 48% increase year-on-year, with a gross margin of 15.8%, reflecting improvements in cost management [2][5]. - The company forecasts revenues of RMB 344.4 billion, RMB 370.8 billion, and RMB 422.5 billion for 2025, 2026, and 2027 respectively, with net profits of RMB 13.8 billion, RMB 15.5 billion, and RMB 19.4 billion for the same years [6][12]. - The report indicates an expected EPS of RMB 1.37, RMB 1.53, and RMB 1.92 for 2025, 2026, and 2027 respectively, with a projected PE ratio of 20x for 2025 [5][12]. Market Outlook - The company is set to launch several new models, including the Lynk & Co Z10 and Zeekr 9X, which are anticipated to enhance revenue and profitability [4][12]. - The report highlights the importance of the GEA platform in driving profitability and operational efficiency, suggesting a positive outlook for the company's future performance [3][12].