20241115-招银国际-吉利汽车-00175.HK-3Q24_NEV_sales_and_profits_pave_way_for_FY25_5页_1mb

Geely Automobile (175 HK) Investment Report Summary

Key Analysis:
Geely Automobile maintains a BUY rating** with an HKD 19.00 target price, representing a 36.7% upside. Despite 3Q24 net profit below prior forecasts, SG&A control and NEV profitability were strong.

3Q24 Performance Highlights:

• Revenue slightly lower than expectations due to accounting standard changes.
• Operational profit (RMB 3.0bn) beat forecasts by 13%.
• NEV sales drove significant growth; net profit from NEVs improved in 3Q24.

FY25 Outlook:

• Sales volume expected to increase 18% to 2.38mn units, supported by new NEV models like Galaxy E5.
• NEV sales volume projected to reach 1.32mn units, accounting for 55% of total sales.
• Gross margin target for FY25E raised to 15.6%; revised net profit forecast at HKD 12.4bn, up 43% from prior estimate.

Valuation & Business Strategy:

• SOTP valuation splits Zeekr (owned 51%) at 0.7x core revenue, assigning HKD 83bn market cap. Other businesses valued at 12x FY25E P/E.
• Key risks include lower-than-expected NEV GPM and sector de-rating.

Investment Action:
Raises target price from HKD 14 to HKD 19. Recommends investors consider stock for a potential +36.7% return.