Core Viewpoint - The current competitive landscape in the new energy vehicle sector is not favorable for Geely, prompting strategic adjustments and the privatization of Zeekr to enhance operational efficiency and market positioning [1][3][36]. Group 1: Privatization of Zeekr - Geely announced a non-binding offer to privatize Zeekr, which it currently holds approximately 65.7% of, at a price of $2.566 per share, representing a 13.6% premium over the last trading day [3][5]. - The privatization allows Zeekr to delist from the NYSE and integrate into Geely's structure, which is seen as a necessary move given the uncertain outlook of remaining publicly listed [5][36]. - This strategic move is viewed as a way for Geely to consolidate its resources and streamline operations amid increasing competition in the new energy vehicle market [6][30]. Group 2: Strategic Adjustments - Geely's management has emphasized a focus on core automotive operations, aiming to enhance efficiency and strategic collaboration across its various business units, as outlined in the "Taizhou Declaration" [6][8]. - The declaration highlights the need for a comprehensive review of Geely's business segments, aiming to clarify brand positioning and reduce internal competition [6][8]. - The integration of brands like Lynk & Co and Zeekr is part of a broader strategy to eliminate redundancy and improve resource utilization [8][9]. Group 3: Market Performance and Challenges - Despite the strategic adjustments, Geely's higher-end brands, including Zeekr and Polestar, have struggled in the market, with Polestar selling only 3,114 units in 2024 [10][12]. - The competitive landscape has intensified with the entry of new players like Xiaomi, which has significantly outperformed Geely's brands in sales [12][19]. - Geely's internal brand competition has led to confusion regarding product positioning and market strategy, impacting overall sales performance [12][19]. Group 4: Financial Performance of Zeekr - Zeekr has faced significant financial losses since its inception, with net losses of 4.514 billion, 7.655 billion, 8.264 billion, and 5.79 billion yuan from 2021 to 2024 [27]. - The brand's sales performance has not met expectations, with only 5.5 million units sold in the first four months of 2025, falling short of its annual target [26][27]. - The financial challenges faced by Zeekr are becoming increasingly apparent as competitors in the new energy sector begin to achieve profitability [27][30]. Group 5: Cost Control and Competitive Positioning - Cost control is a critical focus for both Zeekr and Geely, with expectations that the integration will lead to reduced R&D and BOM costs by 5% and 3%, respectively [30][31]. - The consolidation of brands is anticipated to enhance negotiation power with suppliers, thereby improving competitive pricing [30][31]. - The shift to a more streamlined operational model is seen as essential for maintaining competitiveness in a rapidly evolving market [30][31].