Incident Overview: The company issued a sales announcement for May 2024. Total wholesale sales volume in May was 1.61 million units, +33.8% YoY, +4.8% YoY; January-May cumulative 790,000 units, +42.0% YoY.
Among them, sales of new energy vehicles in May were 58,673 units, +117.0% year on year, +14.1% month on month, penetration rate 36.5%; in January-May, sales of new energy vehicles were 196,000 units, +111.9% year on year. By brand: Geely sold 120,000 units in May (Galaxy 14,193 units), with cumulative sales of 620,000 units in January-May (65,000 Galaxy units), +38.9% year over year; Extreme Krypton sold 18,616 units in May, cumulatively 67,764 units in January-May, +111.7% year over year; Lynk & Co sold 21,778 units in May, with sales of 101,561 units in January-May, +54.7% year over year.
Wholesale sales increased in May, and New Energy performed brilliantly. The company's overall wholesale sales performance in May was impressive. The company's total wholesale sales volume (including Lynk & Co) was 1.61 million units, +33.8% year over year and +4.8% month over month. Benefiting from the continued popularity of Extreme Krypton 001, Galaxy and Lynk & Co sales increased, and new energy performance was strong. In May, the company sold 58,673 new energy vehicles, +117.0% year-on-year, and +14.1% month-on-month; among them, Gekrypton hit a new monthly sales high, achieving sales volume of 18,616 units, +15.7% month-on-month. The Galaxy and Lynk & Co brands sold 14,193 and 21,778 vehicles respectively in May, +11.5% and +16.3% month-on-month, with strong overall performance. In terms of main brands, Geely Galaxy L7, Galaxy L6, Panda MINI, Geometry E, Binyue, and Binrui Cool all launched Dragon models in April, and the facelift is expected to drive demand.
Extreme Krypton MIX and Galaxy E5 will be launched with a strong product cycle throughout the year. The Krypton MIX (Baby Bus) is positioned as a crossover SUV for family travel. It has a wheelbase of over 3 meters, a cockpit space utilization rate of over 80%, and a penetrating electric double door. Although it is a large car, it has the flexibility of a small car, and the new car is expected to be launched in the second half of the year. Geely Galaxy E5 debuted on May 13. The new car is positioned as a compact SUV, based on the GEEA 3.0 electronic and electrical architecture, using CTB battery body integration, Galaxy 11-in-1 smart electric drive, Aegis Dagger battery, and Flyme Auto vehicle system, etc., and is expected to be launched in the second half of the year. Looking ahead to 2024H2, other new cars include Galaxy 2 SUVs, Extreme Krypton medium and large SUVs, and Linker pure electric models. The product cycle is strong. We are optimistic that new energy will accelerate the transformation of new energy under the efforts of Extreme Krypton, Galaxy, and Lynk & Co.
Strong export demand accelerates the expansion of the global market. In May, the company's export sales volume reached 36,890 vehicles, accounting for 23.0%, +61.3% year-on-year, and -3.3% month-on-month. In January-May, the company exported a total of 162,000 vehicles, +64.5% year-on-year.
In the future, the main export markets for fuel vehicles will be Southeast Asia, South Korea, Europe, and the Middle East. Extreme Krypton targets the high-end European market. Up to now, the first batch of offline stores have landed in Sweden, the Netherlands, and Macau, China, and will later enter most Western Europe regions in 2026; during the Lynk & Co Auto Show, they signed contracts with dealers in six Latin American countries to accelerate their entry into the Latin American market while the European market is developing steadily.
Investment advice: The company accelerates overtaking curves in terms of brand power, product definition and innovative marketing, pointing the finger at international first-tier car companies. Maintaining the profit forecast, the 2024-2026 revenue is expected to be 2,247.8/2689/$298.83 billion, net profit due to mother of $74.3/116.1/$15.01 billion, EPS of $0.74/1.15/1.49, corresponding to PE 12/8/6 times the closing price of HK$9.47 on May 31, 2024, maintaining the “recommended” rating.
Risk warning: New car sales fall short of expectations; the pace of new product launches falls short of expectations; the “price war” intensifies.