【行业研究报告】吉利汽车-More synergies to come

16May2025
CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdate
GeelyAutomobile(175HK)
Moresynergiestocome
MaintainBUY.Geely’s1Q25netprofitofRMB5.7bnwasinlinewithitsprevious
profitalertofRMB5.2-5.8bn,whileitsSG&Aexpensesweresignificantlylower
thanourpriorforecast.Thismayhavereflectedtheinitialsynergiesbetween
ZeekrandLynk&Co,andweexpectmoresynergiestocomeafterthe
integrationofdifferentbrands,platformsandmanagement.Wereviseupour
FY25EandFY26Enetprofitforecastbothby4%.
1Q25costcontrolbetterthanexpected.Geely’s1Q25revenueandGPM
bothwerebelowourpriorexpectation,probablyduetothepricereduction
bothwerebelowourpriorexpectation,probablyduetothepricereduction
inearlyMarinordertocompetewithBYD’sfaceliftedmodels.Zeekr’sGPM
in1Q25wasabout3pptshigherthanourforecast,astheZeekr009’sGPM
couldbesignificantlyhigherthanourprojection.Thatalsoresultedina
better-than-expectednetprofitforZeekr.Totalsellingandadministrative
expensesin1Q25fell12%YoYand2%YoY,respectively,despite25%
YoYgrowthinrevenue.That,alongwithhigher-than-expectedgovernment
grants,resultedina10%beatinitsoperatingprofitin1Q25.
Moresynergiestocome.ItappearstousthatGeely’ssuperbcostcontrol
in1Q25hasreflectedtheinitialsynergiesbetweenZeekrandLynk&Co.
Totalsavingsinprocurementcosts,SG&AandR&Dexpensescombined
couldbeasmuchasseveralbillionRMB,basedonmanagement’s
guidance,afterthefullintegrationofbrands,platformsandmanagement.
ShouldGeely’ssharepricecontinuetorise,moreshareholdersofZeekr(ZK
US,NR)mayconverttheirsharestoGeely’s,whichcouldlowerGeely’s
cashburdentoprivatizeZeekr.Weexpectasignificantprofitincreaseat
ZeekrtostartfromFY26E,whichmeansnowcouldbeagoodtimingforthe
privatization.
Earnings/Valuation.AlthoughGeely’sinventoriesincreasedbyabout
156,000unitsinthefirstfourmonthsof2025,Geely’sretailsalesvolume
rose41%YoYduringthesameperiod.WeraiseourFY25Esalesvolume
forecastfrom2.74mnunitsto2.8mnunits.WealsoreviseupFY25E
forecastforGPMby0.7pptsto16.1%.Accordingly,wereviseupourFY25E
netprofitby4%toRMB15.2bn.WealsoraiseourFY26Enetprofitby4%
toRMB16.7bnfortworeasons:1)costsavingsfromsynergies;2)greater
stakesinZeekr(100%vs.65.7%)aftertheproposedprivatization.
WemaintainourBUYratingandraiseourtargetpriceslightlyfrom
HK$23.00toHK$24.00,basedon15xourFY25EP/E.Wechangeour
valuationmethodologyfromsum-of-the-partstoP/E,asGeely’sbusinesses
aretobemoreintegrated.Weareoftheviewthatsuchmultipleisjustified
giventhatBYD(1211HK,BUY)isnowtradingat21xourFY25EP/E.