Core Viewpoint - Geely Automobile reported strong Q3 performance with significant growth in sales and revenue, driven by improved vehicle structure and recovery in exports, despite some pressure on gross margins due to the rising share of new energy vehicles [1][2] Financial Performance - Q3 sales reached 761,000 units, up 42.5% year-on-year and 8.1% quarter-on-quarter, with total revenue of 89.19 billion yuan, reflecting a 47.7% increase year-on-year and 14.7% quarter-on-quarter [1] - The average selling price (ASP) per vehicle in Q3 was 117,000 yuan, showing a 3.7% increase year-on-year and 6.1% quarter-on-quarter [1] - For the first three quarters of 2025, total vehicle sales were 2.169 million units, up 45.6% year-on-year, with revenue of 239.48 billion yuan, a 26.4% increase year-on-year [1] Cost and Profitability - Q3 gross margin was 16.6%, with a year-on-year increase of 1.0 percentage points but a slight decline of 0.5 percentage points quarter-on-quarter [1] - The actual net profit attributable to shareholders for Q2 was 3.96 billion yuan, up 61.3% year-on-year and 20% quarter-on-quarter, with Q3 net profit per vehicle at 5,200 yuan, reflecting a 13.2% increase year-on-year and 11% quarter-on-quarter [1] Operational Analysis and Outlook - Q3 performance was stable, supported by improved vehicle structure and recovery in exports, although gross margin faced slight pressure due to the higher proportion of new energy vehicles and the introduction of lower-margin models [1] - The company is expected to maintain strong performance in Q4, with continued growth in the new energy segment and stable traditional business, as exports have rebounded and fuel vehicle upgrades are anticipated to remain steady [2] Profit Forecast and Valuation - The company maintains a positive outlook for future profitability, projecting net profits of 16.6 billion, 19.68 billion, and 24 billion yuan for 2025, 2026, and 2027 respectively, with corresponding price-to-earnings ratios of 10.45, 8.81, and 7.24 [2]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [10]. Core Insights - The company's Q3 performance is robust, with new car sales reaching 761,000 units, representing a year-on-year increase of 42.5% and a quarter-on-quarter increase of 8.1%. Total revenue for Q3 is 89.19 billion yuan, up 47.7% year-on-year and 14.7% quarter-on-quarter [1]. - The company has shown a strong ability to improve its product mix, driven by the growth in the new energy vehicle segment and a recovery in exports. However, the gross margin has slightly declined due to the increased proportion of new energy vehicles, which typically have lower margins compared to traditional fuel vehicles [2]. - The company is expected to maintain strong operational performance in Q4, with continued growth in the new energy segment and stable performance in traditional business lines [2][3]. Summary by Sections Financial Performance - In Q3, the company achieved a gross margin of 16.6%, with a year-on-year increase of 1.0 percentage points. The actual net profit attributable to the parent company for Q2 was 3.96 billion yuan, reflecting a year-on-year increase of 61.3% [1]. - For the first three quarters of 2025, the company sold 2.169 million new cars, a year-on-year increase of 45.6%, with total revenue of 239.48 billion yuan, up 26.4% year-on-year [1]. Cost and Expenses - The company’s sales, administrative, and R&D expense ratios for Q2 were 6.0%, 1.5%, and 4.9%, respectively, showing a slight decrease from the previous quarter [1]. - The report highlights that the company has maintained a stable expense structure, with expense ratios decreasing quarter-on-quarter [2]. Future Outlook - The company is expected to continue its upward trajectory, with new models like the Zeekr 9X and Galaxy M9 set to enhance the product lineup and improve profitability [2][4]. - The report projects net profits for 2025, 2026, and 2027 to be 16.6 billion, 19.68 billion, and 24 billion yuan, respectively, corresponding to PE ratios of 10.45, 8.81, and 7.24 [4].