Guozheng International released a research report stating that it maintains a "buy" rating for Geely Autos (00175), bullish on Geely's major brands, which are continuously upgrading and iterating under the empowerment of new technologies, driving sales and performance growth. The target price has been raised to 19 Hong Kong dollars. The company has achieved 85.8% of the annual sales target of 2 million vehicles, and the bank believes that in 2024 the company will exceed its sales target, reaching 2.2 million vehicles.

The main points of Guojing International are as follows:

Performance is in line with expectations.

In the first three quarters of 2024, Geely Autos achieved revenue of 167.68 billion yuan, a year-on-year increase of 36%; net income attributable to shareholders was 13.05 billion yuan, a year-on-year increase of 358%. Among them, the third quarter revenue was 60.38 billion yuan, a year-on-year increase of 20%; net income attributable to shareholders was 2.46 billion yuan, a year-on-year increase of 92%. The gross margin in the first three quarters was 15.3%, up 0.5 percentage points year-on-year. The growth in performance and improvement in profitability are attributable to steady growth in sales and optimization of product structure. From January to October, the cumulative sales volume of the company was 1.716 million vehicles, a year-on-year increase of 28.9%. The company has completed 85.8% of its annual sales target of 2 million vehicles, and the bank believes that in 2024 the company will exceed its sales target, reaching 2.2 million vehicles.

The all-new generation of Raytheon super electric hybrid technology accelerates product refresh.

Geely Autos officially launched the Raytheon EM-i super electric hybrid, and the first A-class hybrid starship equipped with Raytheon EM-i will be launched in November. The Raytheon EM-i technology is outstanding: 1) In terms of fuel economy, the Raytheon EM-i engine has a thermal efficiency of 46.5%, a range of 2390.5 kilometers, and a combined fuel consumption of only 2.62L; 2) In terms of electric drive efficiency, Geely has reduced the weight by 13.5% through the new generation E-DHT11 1-in-1 hybrid drive, successfully making the electric drive system more compact and efficient. 3) In terms of intelligent energy management of the hybrid system, Raytheon EM-i introduces AI technology into the hybrid system, which can intelligently optimize the oil and electricity switch and predict the vehicle's energy consumption needs based on navigation information, habitual routes, and other data, providing drivers with personalized energy management solutions.

Strategic integration of Zeekr and Lynk & Co.

Geely Holdings will transfer its 11.3% stake in Zeekr Smart Technology to Geely Auto Holdings. After the transaction is completed, Geely Auto's shareholding in Zeekr will increase to about 62.8%. At the same time, the equity structure of Lynk & Co has been optimized, with Zeekr holding 51% of Lynk & Co's shares, while the remaining 49% of Lynk & Co's shares continue to be held by a wholly-owned subsidiary of Geely Auto 0175.HK. After integration, Geely Auto can reduce redundant investments in various market segments and strengthen collaboration in terms of brand and product, technology, supply chain, marketing and services, and international market expansion, thereby leveraging its economies of scale to generate synergies in sales, revenue, and profit.