Haitong Securities International·2025-08-17 06:34Investment Rating - Maintain OUTPERFORM rating with a target price of HK$27.45 [2][4][12] Core Insights - The company achieved a revenue growth of 27% YoY in H1 2025, reaching Rmb150.28 billion, slightly above market expectations, with vehicle sales increasing by 47% YoY to 1.409 million units, resulting in a market share of 10.4% [5][13] - The company aims to narrow the market share gap with the industry leader to less than 4% and ultimately overtake them [5][13] - The gross margin for H1 2025 was reported at 16.4%, a slight decrease of 0.3 percentage points YoY [5][13] - The net cash position stood at Rmb38.91 billion, indicating a strong liquidity position [5][13] Financial Performance - The reported net profit attributable to shareholders was Rmb9.29 billion, down 14% YoY, but core net profit surged 102% YoY to Rmb6.66 billion [5][14] - Selling and administrative expenses (SG&A) saw a significant reduction, with the selling expense ratio at 5.6% and administrative expense ratio at 1.9%, reflecting improved efficiency from brand integration [5][14] - R&D spending decreased by 8.6% YoY to Rmb8.35 billion, with the R&D-to-revenue ratio at 5.6% [5][14] Strategic Developments - The merger with Zeekr is on track, pending shareholder approvals, aiming to streamline operations and enhance efficiency [6][15] - Post-merger, the company will focus on four distinct brands: Geely Auto, Geely Galaxy, Zeekr, and Lynk & Co, with a strategy to accelerate new model launches in H2 2025 [6][15] - The company emphasizes a shift towards fair and high-quality growth in the automotive market, moving away from price wars [6][15] Product Pipeline - Key new launches in H2 2025 include: 1. Galaxy A7, launched in August, targeting the Rmb100k PHEV sedan segment [7][16] 2. Galaxy M9, a flagship PHEV SUV expected in Q3 [7][16] 3. Galaxy Xingyao 6, a compact PHEV sedan launching in Q4 [7][16] 4. Zeekr 9X, set to launch in Q3 as a new tech flagship [7][16]