Financial Data and Key Metrics - Q3 2024 vehicle sales revenue exceeded RMB14.4 billion, setting a new record [8] - Vehicle margin reached 15.7% in Q3 2024, reflecting continuous profitability improvement [8] - Cumulative deliveries for 2024 reached nearly 170,000 units, with a new monthly record of over 25,000 units in October [5] - ZEEKR 7X deliveries exceeded 20,000 units within 50 days of launch, breaking the delivery record for luxury pure electric vehicles [6] - ZEEKR-009 achieved 1,500 deliveries within 159 days of launch, surpassing combined sales of the 2nd to 10th highest-selling premium four-seaters [7] Business Line Data and Key Metrics - ZEEKR 7X became the second model with monthly deliveries exceeding 10,000 units, marking a strong presence in the mainstream SUV market [6] - ZEEKR-001 and ZEEKR-009 continued to lead in their respective premium segments [7] - ZEEKR-009's strong market performance positively contributed to the company's gross margin [7] - ZEEKR's domestic one-stop channel expansion accelerated, with 100 ZEEKR houses launched in September, bringing the total to over 110 nationwide [8] Market Data and Key Metrics - Domestic market penetration rate for new energy vehicles surpassed 50% for three consecutive months [5] - ZEEKR has entered over 40 countries and regions, covering Europe, Asia, Oceania, Southeast Asia, and Latin America [8] - In Europe, Lynk & Co is cooperating with Volvo, opening over 30 new dealerships and planning to expand to over 100 [31] Company Strategy and Industry Competition - ZEEKR aims to achieve annual sales of 230,000 units in 2024, targeting monthly deliveries of over 30,000 units in the next two months [6] - The company is focusing on intelligent functions, with SEA Autonomous Driving 2.0 achieving nationwide rollout ahead of schedule [9] - ZEEKR plans to integrate with Lynk & Co to expand market segments, covering 60% of the Chinese domestic passenger car market [15] - The integration aims to reduce competition between ZEEKR and Lynk & Co, with combined sales expected to exceed 500,000 units in 2024 [17] Management Commentary on Operating Environment and Future Outlook - Management is confident in achieving the annual sales target of 230,000 units, driven by strong order trends and year-end market demand [6] - The company expects to achieve a new monthly delivery record of over 30,000 units in the next two months [6] - ZEEKR's global strategy is advancing steadily, with plans to expand further into international markets [8] - The integration with Lynk & Co is expected to bring significant synergies, including cost savings and improved operational efficiency [19][25] Other Important Information - Geely Holding transferred 11.3% of its shares in ZEEKR to Geely Automobile, increasing Geely Automobile's shareholding in ZEEKR to approximately 62.8% [11] - ZEEKR will hold 51% of Lynk & Co's shares, with the remaining 49% held by Geely Automobile's wholly-owned subsidiaries [12] - The company plans to roll out map-free urban NZP for all 2025 model years of ZEEKR-001, ZEEKR-007, ZEEKR-7X, and ZEEKR mix by the end of 2024 [9] Q&A Session Summary Question: Impact of ZEEKR's M&A with Lynk & Co - The integration aims to deeply integrate business operations, optimize management, and create better synergies for shareholders [14] - The combined company will cover 60% of the Chinese domestic passenger car market, significantly boosting growth potential [15] - The integration will reduce competition between the two brands and aim for annual sales of 1 million units [17] Question: Overseas Market Challenges and Integration Benefits - ZEEKR and Lynk & Co will leverage each other's existing infrastructure for international market expansion [28] - In regions like Israel and Saudi Arabia, ZEEKR will utilize Lynk & Co's sales channels, while in Mexico, ZEEKR will introduce BEV models and Lynk & Co will introduce PHEV models [29] - Lynk & Co's cooperation with Volvo in Europe will benefit ZEEKR's expansion in the region [31] Question: Technology Integration Post-Merger - ZEEKR and Lynk & Co will unify their architectures, powertrains, and ADAS systems to achieve significant synergies [24][39] - The company expects to reduce R&D expenses by 10%-20% and achieve 5%-8% BOM cost reduction post-integration [40] Question: Gross Margin Guidance for Q4 2024 - Q4 gross margins are expected to improve, driven by strong demand for high-margin models like ZEEKR-009 [55] - The integration with Lynk & Co and the rollout of large-size luxurious PHEV vehicles will further contribute to gross margin improvement [56] Question: Sales Distribution Integration Post-Merger - ZEEKR will continue its direct-to-customer sales model, while Lynk & Co will maintain its dealer-based approach [59] - ZEEKR plans to expand its sales reach in lower-tier cities by leveraging Lynk & Co's existing infrastructure [60] Question: Combined Sales Target for New ZEEKR - The company aims to achieve 1 million annual sales as soon as possible, with detailed breakdowns to be provided in future reports [61] Question: Optimal Number of Models Post-Integration - The company plans to reduce the number of models to focus on high-volume, benchmark products [63] - ZEEKR will roll out four new models in 2025, positioned in different market segments [64] Question: Business Model Shift Post-Lynk & Co Acquisition - The integration will bring three manufacturing facilities from Lynk & Co, but ZEEKR will continue to optimize its asset-light model [67] - No further plans for acquiring additional manufacturing facilities are currently in place [68]
Zeekr Intelligent Technology(ZK) - 2024 Q3 - Earnings Call Transcript