Investment Rating - The report maintains an "Outperform" rating for Geely Automobile Holdings with a target price of HK$28.85 [2][4][15]. Core Insights - Geely's vehicle sales reached 1.409 million units in the first half of 2025, with expectations for significant growth in the second half due to a faster rollout of new models, likely exceeding the revised target of 3 million units for the year [4][15]. - The merger with Zeekr is expected to enhance Geely's core EV assets and strengthen its group platform strategy, aligning with the "One Geely" vision [5][16][17]. - The report forecasts vehicle deliveries of 3.11 million, 3.56 million, and 4.00 million units for 2025, 2026, and 2027, respectively, with NEV penetration rates of 56%, 57%, and 65% [4][15]. Financial Projections - Revenue is projected to grow from RMB 240.19 billion in 2024 to RMB 322.07 billion in 2025, with a year-on-year growth rate of 34% [9][10]. - Net profit is expected to remain stable at RMB 16.61 billion in 2025, with projected EPS of RMB 1.65, RMB 1.91, and RMB 2.07 for 2025, 2026, and 2027, respectively [9][10][13]. - The gross profit margin is anticipated to improve gradually, reaching 16.5% in 2025 and 16.8% by 2027 [9][10]. Strategic Merger Details - The merger with Zeekr, finalized on July 15, 2025, involved Geely acquiring all outstanding shares of Zeekr for approximately US$2.4 billion, with shareholders given the option of cash or stock [5][16]. - This merger is seen as a strategic move to consolidate resources, enhance operational efficiency, and secure core assets under Geely's control [6][19]. Product Launch Pipeline - Geely plans a robust product launch schedule in the second half of 2025, including several new models across its brands, which is expected to support the sales target of 3 million units [7][17].

Core Viewpoint - The merger between Geely Automobile and Zeekr marks a significant consolidation in the Chinese automotive industry, aimed at enhancing competitiveness and operational efficiency in the face of industry challenges [1][4][11] Strategic Transformation - The merger is a strategic response to the challenges posed by the rapidly changing automotive landscape, with Geely's CEO emphasizing the need for quick integration to improve competitiveness [6][11] - Geely's "One Geely" strategy aims to eliminate internal resource waste and streamline operations across its various brands [4][6] Financial Aspects - Geely acquired the remaining 37.2% of Zeekr for approximately 17.2 billion RMB, with cash and stock options providing a premium over previous trading prices [3][4] - Since its listing in early 2024, Zeekr's market value has dropped from $11 billion to $5.7 billion, a decline of 48% [6] Synergy and Efficiency - The merger is expected to create synergies that will reduce R&D costs by 10%-20% and supply chain costs by 5%-8%, while improving production capacity utilization by 3%-5% [7][8] - The integration of Zeekr's technology with Geely's existing resources is anticipated to enhance the overall technological capabilities and accelerate product development [7][8] Market Positioning - Post-merger, the brand structure will be clearer, with Zeekr focusing on the luxury electric vehicle market, Lynk & Co on the mid-range hybrid sector, and Geely on the mainstream market [7][8] - The merger will expand Zeekr's market reach from 50 to 200 cities, significantly increasing its penetration in lower-tier markets [8][10] Customer Impact - Existing Zeekr customers are assured that their ownership experience will remain unchanged, with potential enhancements in service and technology offerings [9][10] - The merger is expected to lead to more competitive pricing and better configurations for new models, benefiting consumers [9][10] Industry Implications - This merger is seen as a shift from chaotic competition to a more systematic approach within the electric vehicle sector, setting a precedent for resource consolidation [10][11] - Analysts view the merger as a positive signal for Geely, with several investment firms raising their target prices for the company [10][11]

Group 1 - The company sold 236,000 vehicles in June, representing a year-over-year increase of 42.1% [1] - For the first half of the year, the company achieved total vehicle sales of 1.41 million, a year-over-year increase of 47.4% [2] - The company raised its annual sales target to 3 million vehicles, which is a 38% increase compared to the previous year [1][2] Group 2 - The company held a technology launch event for the Zeekr 9X on July 9, introducing the world's first full-stack 900V high-voltage hybrid architecture, SEA-S [1][3] - The Zeekr 9X is expected to start pre-sales at the end of August and is positioned as the brand's flagship hybrid model [3] - The Zeekr 9X features a maximum engine power of 205 kW and a thermal efficiency exceeding 46%, with a 20%-80% battery recharge time of only 9 minutes [3] Group 3 - The company expects to see significant profit growth, with net profits for 2025, 2026, and 2027 projected at 13.84 billion, 17.9 billion, and 22.3 billion yuan respectively, reflecting year-over-year increases of 47%, 30%, and 24% [1][3] - The current stock price corresponds to P/E ratios of 11, 8.6, and 7 for the years 2025, 2026, and 2027, respectively, with a recommendation to "buy" [1][3]

Investment Rating - The report maintains a "Buy" rating for the company [2][5] Core Views - The company has shown significant growth in Q1, with revenue reaching 72.495 billion yuan, a year-on-year increase of 24.5%, and net profit attributable to shareholders at 5.672 billion yuan, up 263.6% year-on-year [9] - The gross margin improved to 15.8%, reflecting a 0.2 percentage point increase, driven by record sales, growth in the new energy sector, product mix optimization, and scale effects [9] - The company aims to fully integrate its brands under the "One Geely" strategy, enhancing resource synergy and competitiveness in the passenger vehicle market [9] Financial Forecasts and Investment Recommendations - Adjusted revenue and gross margin forecasts predict EPS for 2025-2027 to be 1.36, 1.54, and 1.94 yuan respectively, with a target price set at 20.40 yuan [2] - The company is expected to achieve a revenue of 305.782 billion yuan in 2025, with a year-on-year growth of 27.3% [4] - The net profit attributable to shareholders is projected to be 13.716 billion yuan in 2025, reflecting a year-on-year decrease of 17.5% [4] Key Financial Information - The company reported a revenue of 179.204 billion yuan for 2023, with a year-on-year growth of 21.1% [4] - The gross profit for 2023 was 27.415 billion yuan, with a gross margin of 15.3% [4] - The net profit attributable to shareholders for 2023 was 5.308 billion yuan, with a net margin of 3.0% [4] Sales Performance - The company sold a total of 703,800 vehicles in Q1, marking a 47.9% increase year-on-year, with new energy vehicle sales reaching 339,200 units, up 135.4% [9] - The penetration rate of new energy vehicles in the domestic market reached 52.2%, exceeding the industry average [9] Strategic Developments - The company is advancing its "Taizhou Declaration," focusing on its core automotive business and plans to privatize and integrate the Zeekr brand to enhance operational efficiency [9]

Core Viewpoint - Geely Auto is undergoing significant restructuring, including the planned acquisition of Zeekr, which aims to fully integrate the two companies and enhance operational efficiency in the high-end electric vehicle market [1][3][10]. Group 1: Company Strategy and Restructuring - Geely Auto's recent quarterly earnings meeting included discussions on the merger with Zeekr, marking a shift towards a unified strategy called "One Geely" [1][3]. - The merger will result in key executive changes, with An Conghui becoming the CEO of Geely Holding Group and Gan Jiayue taking over as CEO of the merged Geely Auto [1][3]. - The strategic integration aims to streamline operations and improve management efficiency, which is seen as essential in the competitive Chinese automotive market [7][13]. Group 2: Financial Performance - In Q1 2025, Zeekr Technology Group reported total revenue of 22.019 billion yuan, with vehicle revenue of 19.096 billion yuan, reflecting a year-on-year growth of 16.1% [10][11]. - The gross margin for Zeekr's vehicles reached 21.2%, an increase of 7.2 percentage points year-on-year, indicating improved profitability [11]. - The merger is expected to yield significant cost savings, with projected reductions in procurement costs by 3% and enhancements in R&D efficiency by 10-20% [13]. Group 3: Market Position and Product Strategy - Zeekr has established itself as a strong player in the high-end electric vehicle segment, with the Zeekr 001 achieving over 70,000 deliveries in its first full year [3][4]. - The recent launch of the Zeekr 007GT at a lower price point than expected, despite its higher production costs, showcases the brand's competitive pricing strategy [15]. - Future product launches include the Zeekr 9X and Zeekr 8X, targeting the premium market segment, while the Lynk & Co Z10 will cater to a more budget-conscious audience [17][18].