【行业研究报告】吉利汽车-PHEV could be a positive surprise in FY23

UpgradetoBUY.WeupgradeGeelyAutomobiletoBUYfromHoldaswesee
progressiveimprovementatZeekrandmorePHEVmodelrolloutsnextyear,
whichcouldboostitsNEVsalestoabout40%oftotalsalesvolumeinFY23,on
ourestimates.WevalueZeekrslightlyhigherthanXpeng’scurrentmarketcap
andGeely’sotherbusinessesat15xourFY23EP/E.
Zeekrisontrackforlong-termdevelopment.Zeekrislikelytoendtheyear
of2022withitssalestargetof70,000unitsachieved,whichexceedsmany
of2022withitssalestargetof70,000unitsachieved,whichexceedsmany
investors’initialexpectation.WeprojectZeekr’ssalesvolumetodoublein
FY23E,aidedbyanewcompactSUV.WevalueZeekr2.5x(thesameasour
targetvaluationforXpeng)FY23Ecorerevenue(excludingViridi’sbattery
packsalesandR&Dservices),whichwouldresultinHK$109bnfor100%
Zeekr’svaluation.Despitelaggingautonomousdrivingtechnologies,Zeekr’s
recentsalesmomentumandpricepositioningarestrongerthanXpeng.The
grossmarginimprovementatZeekrcouldalsobekeyforvaluationnextyear.
WeprojectGeely’sPHEVsalesvolume(incl.Lynk&Co)toreach0.2mn
unitsinFY23E.WithlessonslearntfromtheXingyueLandEmgrandL
PHEVs,weexpectGeely’stwonewPHEVsin1H23tobemoresuccessful.
WeareoftheviewthatBYD’s2/3marketshareinthePHEVsegmentisnot
sustainableandGeelyislikelytobeoneofthepeerstograbsharefromBYD.
Valuation/Keyrisks.DespitetripledsalesvolumeforGeometryinFY22E
comparedwithFY21,itsloss-makingandhighratioofride-hailingfleetsmake
usvalueittheleastamongGeely’sNEVbusinesses.Weestimateprofitability
forGeely’sotherbusinesses,includinginternal-combustionengine(ICE)
vehicles,Lynk&Co,IPlicensingandR&Dservices,tobestableinFY23E,
aidedbyalargerportionofmorepremiummodels.WevalueGeely’sallother
businessesexcludingZeekrat15x(prior10x)ourrevisedFY23P/Eamid
higherPHEVsalesvolumeforecast.
WeprojectGeely’sFY23salesvolumetorise3%YoYto1.5mnunits,with
almost0.59mnunitsbeingNEVs.WeexpectZeekr’snetlosstonarrowin
FY23E.Accordingly,weprojectGeely’snetprofittorise18%YoYinFY23E,
but20%lowerthanourpriorforecastduetoheightenedNEVcompetition.We
upgradeourratingtoBUYfromHoldwithourtargetpriceofHK$16.50
unchanged(SOTPvaluationwithdetailsinFigure4).Keyriskstoourrating
andtargetpriceincludelowersalesvolume,especiallyNEVs,thanweexpect.