Strategic Vision & Customer Base - Zhongsheng aims to be the most trusted auto services brand for premium consumers in China[4] - The company has 4.54 million active customers[4] - Zhongsheng has 3.80 million Zhongsheng GO subscribers[4] - The average number of active customers per store is 137,000[4] Market Dynamics & Positioning - Repeat buyers account for approximately 80% of the Chinese auto market in 2024[8] - Zhongsheng's customer service covers 14.6% of the luxury brands in 32 core cities[10] - Zhongsheng operates 439 stores in total[19] - Zhongsheng operates 46 collision centers[19] Financial Performance (1H2025) - After-sales services revenue grew by 4.4% to RMB 5.441 billion[50] - Active customers serviced increased by 1.7% to 4.003 million[50] - Serviced units increased by 9.9% to 4.542 million[50] - Insurance policies brokered increased by 8.1% to 1.204 million[50] - Total revenue decreased by 6.2% to RMB 77.3 billion[88] - New car revenue decreased by 4.7% to RMB 57.9 billion[92] - Used car revenue decreased by 27.0% to RMB 6.0 billion[94] - Accessories, packages and after-sales services revenue increased by 0.1% to RMB 13.4 billion[90] - New car sales volume decreased by 1.7% to 228,649 units[98] - Used car sales volume increased by 9.6% to 111,244 units[98] - Net profit attributable to owners of the parent was RMB 1.011 billion[114]

Investment Rating - The report assigns a "Buy" rating for the company, indicating a potential upside in the stock price [6][7]. Core Insights - The company reported significant growth in Q1 2025, with revenue reaching 72.495 billion RMB, a year-on-year increase of 24.5%, and a net profit of 5.67 billion RMB, up 264% year-on-year, exceeding expectations [7][9]. - The company is accelerating its electric vehicle transformation, with a notable increase in sales of its new energy vehicle brands, which accounted for 48.2% of total sales in Q1, up 18 percentage points year-on-year [9]. - The company is pursuing a strategic integration of its automotive business, including a proposed privatization of its brand Zeekr, which is expected to enhance operational efficiency and reduce costs [9]. Summary by Sections Company Overview - The company operates in the automotive industry, with a current H-share price of 19.24 HKD and a market capitalization of approximately 135.241 billion RMB [2]. Recent Performance - In Q1 2025, the company sold 703,800 vehicles, a 48% increase year-on-year, with new energy vehicle sales rising by 135% [9]. - The overall gross margin for Q1 was 15.8%, reflecting a slight improvement [9]. Financial Projections - Expected net profits for 2025, 2026, and 2027 are projected to be 13.2 billion RMB, 17.6 billion RMB, and 21.8 billion RMB, respectively, with year-on-year growth rates of 44%, 30%, and 24% [7][9]. - The earnings per share (EPS) for the same years are forecasted to be 1.35 RMB, 1.75 RMB, and 2.2 RMB, with corresponding price-to-earnings (P/E) ratios of 13, 10, and 8 [7][9].

Investment Rating - The report assigns a "Buy" rating for the company, indicating a potential upside in the stock price [6][7]. Core Insights - The company reported significant growth in Q1 2025, with revenue reaching 72.495 billion RMB, a year-on-year increase of 24.5%, and a net profit of 5.67 billion RMB, up 264% year-on-year, exceeding expectations [7][9]. - The company is accelerating its electric vehicle transformation, with a notable increase in sales of its new energy vehicle brands, which accounted for 48.2% of total sales in Q1, up 18 percentage points year-on-year [9]. - The company is pursuing a strategic integration of its automotive business, including a plan to privatize its brand Zeekr, which is expected to enhance operational efficiency and reduce costs [9]. Summary by Sections Company Overview - The company operates in the automotive industry, with a current H-share price of 19.24 HKD and a market capitalization of approximately 135.241 billion RMB [2]. Recent Performance - In Q1 2025, the company sold 703,800 vehicles, a 48% increase year-on-year, with new energy vehicle sales rising by 135% [9]. - The overall gross margin for Q1 was 15.8%, reflecting a slight improvement [9]. Financial Projections - Expected net profits for 2025, 2026, and 2027 are projected to be 13.2 billion RMB, 17.6 billion RMB, and 21.8 billion RMB, respectively, with year-on-year growth rates of 44%, 30%, and 24% [7][9]. - The earnings per share (EPS) for the same years are forecasted at 1.35 RMB, 1.75 RMB, and 2.2 RMB, with corresponding price-to-earnings (P/E) ratios of 13, 10, and 8 [7][9]. Strategic Initiatives - The company is focusing on integrating its automotive operations to improve quality and efficiency, with an anticipated overall benefit exceeding 5% post-integration [9].

Financial Performance - In Q1 2025, Geely Automobile achieved revenue of 72.495 billion yuan, a 25% increase from 58.225 billion yuan in the same period last year [2][3] - The net profit attributable to shareholders reached 5.672 billion yuan, up 264% from 1.565 billion yuan year-on-year [2][3] - Total sales volume reached 703,800 units, a 48% increase from 475,700 units in the previous year, marking a historical high for the company [3][4] Brand Performance - The Galaxy brand sold nearly 260,000 units in Q1, a 214% increase, with the Star Wish model achieving over 35,000 monthly sales for two consecutive months [4] - The China Star brand sold 330,000 units, a 10% increase, while Lynk & Co sold 73,000 units, up 19%, with 38,000 of those being electric vehicles [4] - Zeekr delivered 41,000 units, a 25% increase year-on-year [4] Strategic Developments - Geely plans to privatize Zeekr, acquiring all issued shares, which would make Zeekr a wholly-owned subsidiary and lead to its delisting from the NYSE [8] - Following the merger of Zeekr and Lynk & Co, management changes were announced, with Li Donghui becoming Vice Chairman and An Conghui as CEO of Geely Holding Group [8][7] - Zeekr reported a total revenue of 22.019 billion yuan in Q1, with vehicle revenue of 19.096 billion yuan, a 16.1% increase year-on-year [7]

Core Viewpoint - Geely Auto plans to privatize Zeekr by acquiring all outstanding shares at a premium, aiming for a complete merger and delisting of Zeekr [2]. Group 1: Privatization and Acquisition - Geely submitted a non-binding offer to privatize Zeekr at $2.57 per share or $25.66 per ADS, representing a 13.6% premium over the last trading day [2]. - Geely holds approximately 65.7% of Zeekr's total issued share capital, and if the privatization is completed, Zeekr will be delisted and fully merged with Geely [2]. - Funding for the privatization will come from new share issuance, cash reserves, and debt financing [2]. Group 2: Strategic Integration and Growth Plans - Geely's chairman Li Shufu emphasized the need for strategic integration and innovation to enhance profitability and long-term value creation in the competitive automotive market [3]. - In November 2024, Geely announced an increase in its stake in Zeekr to about 62.8%, aiming to strengthen strategic support for Zeekr [3]. - The acquisition of Lynk & Co by Zeekr was completed in February 2025, with Zeekr holding 51% and Geely 49%, establishing the Zeekr Technology Group [4]. Group 3: Sales and Revenue Targets - In 2024, Zeekr Technology Group achieved total revenue of 113.89 billion yuan, with sales exceeding 500,000 vehicles, including 222,100 from Zeekr and 285,000 from Lynk & Co [4]. - The group aims for a 40% growth rate in 2025, targeting annual sales of 710,000 vehicles, with Lynk & Co aiming for 390,000 and Zeekr for 320,000 [4]. - The long-term goal is to become a million-unit annual sales high-end luxury electric vehicle group by 2026 [4].

Core Viewpoint - Geely Auto has proposed a non-binding offer to privatize Zeekr, suggesting a purchase price of $2.57 per share or $25.66 per American Depositary Share, aiming to focus on its core automotive business and enhance operational efficiency [1][2][3] Group 1: Privatization Proposal - Geely Auto announced its intention to privatize Zeekr, which has been listed on the NYSE for only one year, to concentrate on its main automotive business [1][2] - The proposed privatization is part of Geely's strategy to integrate resources, reduce costs, and improve competitiveness in the electric vehicle sector [3] Group 2: Zeekr's Financial Performance - Zeekr completed a Pre-A round financing of $500 million and an A round financing of $750 million, with valuations rising from $9 billion to $13 billion [2] - In 2024, Zeekr reported total revenue of 75.913 billion RMB ($10.4 billion), a year-on-year increase of 46.9%, with a net loss of 5.791 billion RMB, reduced by 29.9% year-on-year [2] Group 3: Strategic Focus and Brand Positioning - Geely aims to enhance brand synergy and maintain distinct positioning for its various brands, including Zeekr as a luxury tech brand and Lynk & Co as a high-end new energy brand [3] - The privatization aligns with Geely's "Taizhou Declaration" to improve resource utilization and strengthen its global competitiveness in the smart electric vehicle market [3] Group 4: Recent Transactions - Geely has also sold stakes in its subsidiary, Geely Xinwanda, to further focus on its automotive business, with the total transaction value amounting to approximately 84.3 million RMB [4]

Group 1 - Zeekr, under the stock code "ZK," went public on the NYSE on May 10, 2024, becoming the fastest IPO in the new energy vehicle sector [1] - On May 7, 2025, Geely Automobile announced a non-binding offer to privatize Zeekr, proposing a purchase price of $2.566 per share or $25.66 per American Depositary Share [1] - Geely currently holds approximately 65.7% of Zeekr's shares, and if the privatization is completed, Zeekr will become a wholly-owned subsidiary of Geely [1] Group 2 - Geely's move to privatize Zeekr is part of its strategy to focus on its core automotive business and enhance competitiveness in the new energy and intelligent vehicle sectors [4] - The merger aims to improve resource integration, reduce operational costs, and enhance user experience, positioning Geely for long-term sustainable development [4] - As of May 7, 2025, Geely's stock price was HKD 16.78, with a total market capitalization of HKD 169.1 billion, while Zeekr's stock price was $22.59, with a market cap of $5.742 billion [4] Group 3 - In Q1 2025, Geely's total sales reached 704,000 units, a 48% year-on-year increase, with new energy vehicle sales at 339,000 units, achieving over 50% penetration in the domestic market [6] - The integration of Zeekr and Lynk & Co resulted in a 21% year-on-year sales increase, with a reduction in costs per vehicle by over 20% [6] - Following the merger, Geely plans to maintain clear market positioning for its brands, with Zeekr targeting the global luxury tech market and Lynk & Co focusing on the mid-to-high-end market [7]

Core Viewpoint - Geely Auto announced a non-binding offer to privatize Zeekr, aiming to acquire all outstanding shares and American depositary shares, which will make Zeekr a wholly-owned subsidiary of Geely Auto and delist from the NYSE [1][3]. Group 1: Geely's Strategic Moves - The acquisition is part of Geely's "Taizhou Declaration," which emphasizes maintaining close communication with international capital markets [1]. - Geely holds approximately 65.7% of Zeekr's total issued share capital, and the proposed acquisition price is $2.57 per share or $25.66 per American depositary share, representing a premium of about 13.6% over the last trading day [3]. - This move is a key step in Geely's strategic integration, following the transfer of 11.3% of Zeekr's shares from Geely Holding to Geely Auto [3]. Group 2: Implementation of the Taizhou Declaration - The Taizhou Declaration, released in September 2024, marks a new phase of strategic transformation for Geely, focusing on five major initiatives: strategic focus, integration, collaboration, stability, and talent [5]. - Geely plans to gradually divest non-core businesses while integrating brands like Radar and Lynk & Co with Geely Auto, and Zeekr with Lynk & Co [5]. - The goal is to enhance competitiveness and create long-term value by focusing on the automotive core business and accelerating the transition to electric and intelligent vehicles [5]. Group 3: Synergies from Brand Integration - Prior to Geely's privatization of Zeekr, Zeekr had already completed its integration with Lynk & Co, with Zeekr holding 51% of Lynk & Co's shares [6]. - The integration is expected to reduce procurement costs by 5%-8%, improve capacity utilization by 3%-5%, and lower R&D expenses by 10%-20% through collaborative efforts [6].

Core Viewpoint - Geely Auto plans to acquire all issued shares of Zeekr, aiming for a complete merger, which will enhance its competitive position in the automotive market [1] Group 1: Company Strategy - Geely currently holds approximately 65.7% of Zeekr's shares, and upon completion of the transaction, Zeekr will be fully integrated into Geely Auto [1] - Geely's Chairman, Li Shufu, emphasized the need for strategic adaptation in response to intense market competition and a complex economic environment [1] Group 2: Business Integration and Innovation - The company aims to consolidate its automotive business, enhance technological advantages, and improve innovation and profitability [1] - Geely is focused on creating long-term value and establishing itself as a leading global smart electric vehicle group [1] Group 3: Market Communication - Geely intends to maintain close communication and cooperation with the US and international capital markets [1]