GEELY AUTO(00175) 兴证国际证券·2024-03-26 16:00Investment Rating - The report maintains a "Buy" rating for Geely Automobile (00175 HK) [2] Core Views - Geely Automobile's core profitability has significantly improved in 2023 due to product structure upgrades, cost control, and economies of scale [2] - The company achieved record-high sales of 1 687 million vehicles in 2023, with new energy vehicle sales growing 48 3% to 487 000 units and exports increasing 38 3% to 274 000 units [2] - Revenue increased by 21% YoY to RMB 179 2 billion in 2023, driven by product value enhancement and business diversification [2] - Net profit attributable to shareholders surged 51% YoY to RMB 5 308 billion in 2023, excluding one-time acquisition gains in 2022 [2] - Gross profit improved significantly, with total gross profit up 31% YoY to RMB 27 4 billion and gross margin increasing from 14 1% in 2022 to 15 3% in 2023 [2] - The company has strong cash reserves, with net cash increasing 46% YoY to RMB 28 4 billion in 2023 [2] 2024 Outlook - Geely Automobile aims to achieve total sales of 1 9 million units in 2024, representing a 13% YoY increase [2] - New energy vehicle sales target is set at 810 000 units, a 66% YoY increase, with new energy penetration rate expected to rise from 29% in 2023 to 42 6% in 2024 [2] - The company plans to launch 9 new energy models across its three brands in 2024 [2] - Geely Automobile is expected to continue its strong product cycle, with recent launches like Galaxy L7 and Lynk & Co 08 performing well, and new models like Zeekr 007 and Galaxy E8 expected to maintain momentum [2] Financial Projections - Revenue is projected to reach RMB 233 76 billion in 2024, with net profit attributable to shareholders expected to be RMB 6 579 billion [3] - The company's main brand is expected to continue contributing stable profits, while losses from Lynk & Co and Zeekr brands are expected to gradually decrease [3] - Sales are forecasted to reach 2 million units in 2024, with Geely main brand, Lynk & Co, and Zeekr expected to sell 1 423 million, 327 000, and 251 000 units respectively [3] Historical Performance - In 2023, Geely Automobile's actual revenue of RMB 179 2 billion exceeded the forecast of RMB 175 7 billion by 2% [6] - The company's gross margin of 15 3% in 2023 was slightly below the forecast of 16 2% [6] - Net profit attributable to shareholders in 2023 was RMB 5 308 billion, 5% below the forecast of RMB 5 601 billion [6]