Event: The company announced sales volume for May 2024. Sales in May were 1.61 million units, up 5% month-on-month and 38% year-on-year. New energy sales in May were 59,000 units, up 14% from the previous month, up 146% year on year, and the penetration rate was 37%. Among them, BEV sales in May were 34,000 units, +63% year over year, and 24,000 PHEV units were sold in May, +741% year over year. In May, 37,000 vehicles were exported, +68% year-on-year.

High-value products are being upgraded at an accelerated pace, and international competitiveness is steadily improving: by brand, the Geely brand sold 120,000 units in May, up 2% month-on-month and 30% year-on-year. Among them, the Galaxy series sold 14,000 units in May, up 12% month-on-month; the China Star high-end series sold 31,000 units in May, with cumulative sales exceeding 1 million units. The Lynk & Co brand sold 22,000 vehicles in May, up 16% month-on-month and 50% year-on-year. The Extreme Krypton brand sold 19,000 units in May, an increase of 115% over the previous year. The new Perface debuted overseas in Saudi Arabia. Three star SUV models were launched in the Mexican market, and Geely's overseas product matrix expanded at an accelerated pace.

Continued ecological improvement and rapid expansion of the Krypton system: By the end of May, Krypton had opened 392 stores worldwide. By the end of May, the number of self-built charging stations for Polar Krypton had reached 1,076 (including dedicated stations), and 487 charging stations had been launched, with a total of 2,615 charging stations.

Investment advice: We expect the company to achieve net profit of 69.81/94.67/11.418 billion yuan in 2024-2026. The corresponding PE was 13.04/9.61/7.97 times, respectively, maintaining the “gain” rating.

Risk warning: Consumer demand falls short of expectations, sales of new models fall short of expectations, increased competition in the industry, etc.