Huachuang Securities·2025-11-18 03:32Investment Rating - The report maintains a "Strong Buy" rating for Geely Automobile (00175.HK) with a target price of HKD 26.00, indicating a potential upside of 51% from the current price [1][7]. Core Insights - Geely Automobile's Q3 2025 performance shows significant growth, with revenue reaching HKD 89.2 billion, a year-on-year increase of 27% and a quarter-on-quarter increase of 15%. The net profit attributable to shareholders was HKD 3.82 billion, up by HKD 1.4 billion year-on-year and HKD 0.2 billion quarter-on-quarter [1][7]. - The company is entering a new product cycle with several competitive new models launched, including the Galaxy A7 and Galaxy M9, which are expected to drive sales growth. The sales volume in October reached 307,000 units, a year-on-year increase of 35% and a quarter-on-quarter increase of 12% [7][8]. - The report highlights the company's improved cost control, with a sales expense ratio of 6.0%, a management expense ratio of 1.5%, and a research and development expense ratio of 4.9% [7]. Financial Projections - Revenue projections for Geely Automobile are as follows: - 2024A: HKD 241.1 billion - 2025E: HKD 344.8 billion - 2026E: HKD 446.3 billion - 2027E: HKD 493.4 billion - The net profit projections are: - 2024A: HKD 16.6 billion - 2025E: HKD 17.8 billion - 2026E: HKD 24.0 billion - 2027E: HKD 27.2 billion [3][9]. Market Position and Valuation - Geely's valuation is considered low compared to its growth potential, with a projected PE ratio of 9x for 2025 and 7x for 2026. The report suggests that the current market pessimism presents a good investment opportunity [7][8]. - The report anticipates that the company will benefit from a recovery in the automotive market and an increase in overseas sales, with total sales expected to reach 3.04 million, 3.73 million, and 4.02 million units from 2025 to 2027, respectively [7][9].