Core Viewpoint - The report from CICC maintains the profit forecast for Geely Automobile (00175) for 2025 and 2026, with a target price of HKD 26.00, indicating a potential upside of 37.2% from the current stock price [1] Group 1: Sales and Revenue Growth - In 1H25, total sales increased by 47% year-on-year to 1.409 million units, driving total revenue up by 40% to CNY 150.29 billion [2] - The sales of new energy vehicles surged by 126% year-on-year to 725,000 units, accounting for 51.5% of total sales, with the Galaxy brand sales increasing by 232% to 548,000 units [2] - Exports of new energy vehicles also performed well, rising by 146% year-on-year to 40,000 units [2] - The company plans to launch six new models in the second half of the year, aiming to exceed total sales of 3 million units for the year [2] Group 2: Profitability and R&D Investment - The gross profit margin in 1H25 was 16.4%, with the profitability of GEA architecture models offsetting some pricing pressures [3] - Lean management led to a reduction in sales and management expense ratios by 1.1 percentage points and 0.7 percentage points year-on-year to 5.6% and 1.9%, respectively [3] - R&D investment increased by 21.3% year-on-year to CNY 7.33 billion, focusing on advanced driving assistance systems and new architecture development [3] - Core operating profit in 1H25, excluding foreign exchange and last year's one-time subsidiary sale impacts, rose by 102% year-on-year to CNY 6.66 billion, indicating a trend of profit recovery [3] Group 3: Strategic Reconfiguration and Globalization - The company is accelerating the implementation of the "One Geely" strategy to achieve resource synergy across multiple brands [4] - In terms of globalization, the company invested in Renault Brazil to leverage its established production system and distribution network for entry into the Latin American market; the Egypt factory has commenced production, and the Indonesia base has started trial production to enhance local supply chain capabilities [4] - The product strategy focuses on comprehensive intelligence, with plans to launch new models equipped with advanced driving solutions, covering the market from entry-level to luxury segments [4]