Geely, Which Has Quietly Occupied The High Ground Of New Energy
Jul 04, 2024
Recently, Geely Auto Group has frequently received good news.
First, Geely Automobile Holdings Co., Ltd. (0175.HK) released its first quarter financial report for 2024, achieving revenue of 52.3 billion yuan, a year-on-year increase of 56%; and achieving a net profit attributable to shareholders of listed companies of 1.561 billion yuan, a year-on-year increase of 119%. As of March 31, 2024, Geely Auto's total cash level reached 39.4 billion yuan.
Then the sales volume in the first half of the year was released. The overall sales volume of Geely Auto Group in the first half of the year was 950,000 vehicles, which has completed 50% of the original target of 1.9 million vehicles. On this basis, Geely Auto Group raised its original full-year target to 2 million vehicles, and the overall penetration rate of new energy products reached more than 40%.
Sales and gross profit double growth
The continuous optimization of product structure and the sharp increase in sales of new energy vehicles are important reasons for the year-on-year growth of its revenue and net profit.
From the perspective of specific products, the growth rate of Geely Galaxy series in the first quarter of this year was obvious. Its Galaxy L7 has delivered nearly 100,000 vehicles in just one year after its launch, ranking first in the electric hybrid SUV market; the first pure electric sedan Galaxy E8 was launched in January, and together with Galaxy L7 and Galaxy L6, it has deepened the market of high-value new energy smart boutique cars with a price range of 100,000 to 200,000 yuan.
Boosted by the sales of Geely Galaxy series, Geely brand sales exceeded 380,000 vehicles in the first quarter. Not only that, Geely Galaxy achieved positive sales growth month-on-month for three consecutive months from March to May.
Driven by product sales, Geely Auto Holdings' gross profit reached 7.15 billion yuan in the first quarter, a year-on-year increase of 51%. But it is worth noting that while gross profit increased, its gross profit margin declined month-on-month.
In the first quarter, Geely Auto Holdings' overall gross profit margin was 13.7%, a month-on-month decline of 2.3%. In this regard, Geely Auto CFO Dai Yong said that with the company's continuous expansion of sales scale, improved capacity utilization, and the launch of new products, the gross profit margin performance in the second half of the year is expected to be better than that in the first half of the year.
Sales target raised to 2 million vehicles
On July 2, Geely Auto (0175.HK) held a performance exchange meeting for the first quarter of 2024. At the meeting, Gan Jiayue, CEO of Geely Auto Group, combined the financial report and the latest sales data to further interpret the increase in sales targets.
Judging from the current sales data, Geely Auto Group's new energy sales in June were 65,959 vehicles; the cumulative sales of new energy vehicles from January to June were 320,185 vehicles, a year-on-year increase of 117%. Among them, the cumulative sales of Geely Galaxy series from January to June were 81,421 vehicles, a year-on-year increase of about 742%; Lynk & Co's new energy family 1-6 sold about 64,072 vehicles, a month-on-month increase of about 23%; Zeekr delivered a total of 87,870 vehicles from January to June, a year-on-year increase of 106%.
Against this background, Gan Jiayue pointed out that the second half of the year is Geely's "product year", and several major brands such as Geely, Lynk & Co, and Zeekr have new products released, and the company is confident in achieving the annual sales target of 2 million.
In addition, Gan Jiayue also gave a detailed introduction to the composition of the 2 million vehicle target. Among them, Geely Auto's domestic sales target is 1.15 million vehicles, Lynk & Co's is 270,000 vehicles, and Zeekr's is 200,000 vehicles; in overseas markets, Geely Auto and Lynk & Co's total sales are 350,000 vehicles, and Zeekr's is 30,000 vehicles.
At present, Geely Auto Group has released or unveiled new cars in the second half of the year, including the pure electric SUV Geely Galaxy E5, which is equipped with Geely GEA global intelligent new energy architecture, 11-in-1 intelligent electric drive, Aegis Dagger Battery, Galaxy Flyme Auto and other latest achievements; Lynk & Co's first pure electric model Z10 also completed its global debut in June; the attention of "Baby Bus" Zeekr MIX has also been rising.
Continue to deepen overseas markets
In the domestic market, Geely Auto Group has intensively launched new products and hit new sales records; in overseas markets, Geely Auto Group is also accelerating its deep cultivation of multiple regional markets.
In fact, in the development history of Geely, the overseas market has always occupied a strong and colorful stroke. On July 3, Li Shufu, chairman of Geely Auto Group, said at the graduation ceremony of Tsinghua School of Economics and Management that Geely's global business is large, with 2/3 of the company's revenue coming from overseas markets and 1/3 coming from the domestic market.
In the first half of 2024, Geely will conquer several more cities overseas.
First, its brands will be listed overseas. On February 25, Lotus Technologies was listed on the Nasdaq Stock Exchange in New York, the United States; on May 10, the Zeekr brand set the fastest "IPO" record in the US stock market.
The second is to enter multiple regional markets. In 2024, the Lynk & Co brand will accelerate the "European Strategy" and "Asia-Pacific Strategy", and has officially entered the Philippines and Vietnam markets so far. At the Beijing Auto Show in April, Lynk & Co signed a series of heavyweight cooperation agreements with dealers in the UAE, Dominican Republic, Costa Rica, Lebanon, Tunisia, Chile and other countries to accelerate the export of new energy vehicles.
Dai Yong said that the company is currently mainly focused on the Middle East, Africa and other regions, and will also focus on Mexico, Vietnam, Indonesia and other markets in the future to enhance channel operation capabilities. At present, Geely's new Preface (Xingrui) has been unveiled overseas in Saudi Arabia, and three SUV models have been launched in the Mexican market.
In terms of sales, Geely's overseas sales target this year has increased from the original 300,000 vehicles to 380,000 vehicles. In the first half of the year, the company sold 197,400 vehicles overseas. Calculated based on the annual KPI of 380,000 vehicles, the completion rate exceeded 51%.
Conclusion: In the increasingly chaotic price war and public opinion war in the auto market, Geely Auto Group's press conferences rarely have exaggerated descriptions, and rarely see the drag of competing products. But among the automakers that have released new energy sales from January to June, Geely Auto Group currently ranks in the top three, second only to BYD and SAIC.
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