Growth recovery: Start a new cycle in 24 years, brand upgrade + channel innovation, electrification rate increase ① 15-17 years, last round of dividend period: autonomous SUV dividend+ popular models such as Emgrand and Boyue launched, sales continued to rise; ② 17-20, pain period: purchase tax reduction and decline + complicated company management structure + aging product cycle, showing slight shortfall under domestic autonomy+new power competition; ③ 21-23, the transformation trial period, the price difference between oil and electricity was large, the price difference between multiple brands overlapped, and the hybrid transformation was slow..
New energy: Galaxy, Extreme Krypton, and Lynk & Co are clearly positioned, and the penetration rate of new energy is expected to be 45% + in 24 years ① Galaxy: Launched in 23, complementing the 10-200,000 price band NEV ToC product layout. Geely's original 100,000 to 200,000 new energy vehicles mainly relied on Geely's own brand and geometry. Among them, the geometry is mainly aimed at the ToB side, while Geely's main brand is mostly oil-switched electric models, and sales are weak. Since its launch in 2023, Galaxy has planned two major categories: L series (hybrid) and E series (pure electric). Galaxy's sales volume is expected to increase further throughout '24.
② Polar Krypton: Steady to medium and positive, Polar Krypton 001 is stable, and 007 is expected to successfully replicate 001. Extreme Krypton 001 is the key for the Extreme Krypton brand to achieve an upward breakthrough. The price of the 24 Extreme Krypton 001 models remained at 269,000 to 329,000 yuan. The price of the entry-level version remained unchanged, and the price of the middle and premium versions dropped by 20,000 yuan. We are optimistic that their sales will stabilize. At the same time, as a model that rivals the Model 3 and Xiaomi su7, the Extreme Krypton 007 has an 800V electrical architecture and 2 Orin X chips, and has outstanding performance in terms of fast charging and high-speed NZP. We expect the car's steady state monthly sales to reach 7K+, making it another popular model after the Extreme Krypton 001. Based on this, the sales volume of Extreme Krypton is expected to reach 230,000 units in 24. Under the large-scale effect, Krypton's profits are expected to reverse losses.
③ Lynk & Co: From oil to electricity to comprehensive promotion of plug-in hybrid strategies, the transformation effect is beginning to show. The Lynk & Co 08 PHEV is iconic for the new energy transition of the Lynk & Co brand. Strategically speaking, Lynk & Co is no longer launching a fuel model, but is creating a new model. Since its launch in September '23, sales have climbed to 10,000 units in December '23, which is a marked increase over the previous fuel-fuel model. Continuing the youthful style of the 08, Lynk & Co 07 is expected to accelerate the penetration rate of Lynk & Co. New Energy.
Fuel vehicles: The basic market for fuel vehicles is solid, contributing steadily to profits
Among Geely's fuel trucks, Emgrand, Binyue, etc. mainly focus on the 50-10,000 market, making it difficult for electric vehicles to penetrate in the short term; while the 10-15 thousand fuel trucks such as Xingrui and Xingyue had a good reputation in the early stages, and monthly sales remained stable at more than 10,000 units against the backdrop of declining average sales in the industry, which was less affected by the price war.
Profit forecast: We expect the company's overall revenue for 2024-2026 to be 2146.26 billion yuan, 2481.52 billion yuan, and 266.740 billion yuan, respectively, and net profit to mother of 74.50, 87.26, and 10.082 billion yuan respectively. The corresponding PE is 12.56, 10.73, and 9.287X, respectively, covered for the first time, giving a “buy” rating.
Risk warning: The macroeconomic recovery falls short of expectations; the supply of new models increases, and the price war will continue; there is a risk that the market acceptance of new models falls short of expectations, the penetration rate of electrification falls short of expectations, and untimely usage information updates in reports.