Core views:
The company may return to 0175 as the main channel in '24, and strategically, profits may also be given higher assessment weight. Long-term tracking has once again revealed changes in the company: we judge that the company may increase the assessment weight of profits in 24 years, logically mainly due to: (1) the impact of the Hong Kong stock market environment, the Krypton spin-off (company announcement), and no significant increase in performance in 23 years; (2) it is not very difficult to achieve 24-year sales volume and new energy transformation goals; (2) it is not very difficult to achieve 24-year sales and new energy transformation goals; strategically or more emphasis is placed on improving profit and profitability.
Taking into account the company's objective capabilities, the neutral forecast is that the 24-year performance is expected to grow to 7.52 billion yuan, +41.7% year-on-year. We expect the company's 24-year performance growth mainly due to: (1) the divestment of Ruilan (company announcement) is expected to bring a positive contribution of 300 million yuan; (2) Lynk & Co., Ltd.'s strategic adjustments in the European market combined with an increase in domestic sales volume, which is expected to contribute 800 million yuan in performance growth; (3) New domestic models and exports drive the sales center upward, which is expected to turn losses into profits in 24 years; (4) the increase in the share of Geely brand fuel vehicle export sales and platform-based model sales, or a positive impact on performance; (5) the company's external technology grants and profits. Furthermore, the only neutral factor that needs to be focused on is the possible adjustment of the Geely brand Galaxy series growth strategy due to increased competition.
In the medium to long term, the company is expected to achieve a new round of growth with excellent evolving and compliant corporate governance capabilities at the bottom, and relying on clearly positioned growth strategies and methodologies. Consider the following factors comprehensively: (1) The company has an excellent organizational and evolving governance structure; (2) emphasizes the cultivation and construction of its own system capabilities, has an innovative culture and complete positive R&D capabilities to build structured vehicles to achieve resource collaboration and enhance comprehensive competitiveness; (3) has strategic strength, emphasizes long-term principles, and has clear multi-brand positioning, so the company can expect a new round of growth.
Profit forecast and investment advice: From a long-term perspective, the company is an excellent Chinese automobile brand based on the global market and has a relatively steady growth model. Profit growth is expected to accelerate under the company's 24-year strategic adjustment. We expect the company's 24-26 EPS to be 0.75/1.07/1.37 per share, respectively, maintaining the firm's reasonable value of HK$14.78 per share unchanged, corresponding 18 times PE in 24, maintaining the company's “buy” rating.
Risk warning: Sales fall short of expectations; strategic transformation falls short of expectations; changes in consumer demand.