20240321-招银国际-吉利汽车-00175.HK-Most_businesses_are_trending_up_6页_1mb

Geely Automobile (175 HK) Analysis Summary # #### Current Performance: * Latest 2023 H2: Revenue in-line with expectations, gross profit margin higher than forecasted by 0.8 ppt; Operating profit slightly lower than estimates; Net profit beat expectations by 18% due to reduced share-based payment, tax expenses, and higher interest income. * Key Business Trends: Most businesses showed improvement in profitability; Zeekr segment net loss of RMB 1.1bn in FY23, better than forecasted loss, with management guiding breakeven in FY2024. * Earnings Quality: FY2023 earnings quality improved compared to FY2021-22, with higher R&D spend (71% YoY increase) but improved net profit margin. #### 2024E Projections: * Sales Volume: Estimated 0.22mn units for Zeekr, up 10,000 units from previous estimate, driven by order backlog; Other brands expected to contribute, with partial exports easing margin pressure. * Profitability: * Geely brand: Lower GPM expected due to increased NEV focus, but benefits from higher exports. * Zeekr and equity-method entities: Margin improvements anticipated, with Lynk & Co loss reduction, Livan disposal, and Proton's contribution. * D&A Reduction: Asset disposals, including stakes in Aurobay, expected to reduce annual D&A by over RMB 1bn. * EPS Revisions: Net profit increased to RMB 6.69bn for FY2024E, up 26.1% YoY from FY2023A. #### Valuation: * Target Price: HK$14.00, representing 58.6% upside from current price; SOTP valuation based on Zeekr 1.3x revenue and other businesses 13x P/E. * Multiples: P/E 12.3x, P/B 1.0x, P/CFPS 3.2x for FY2024E. #### Risks: * Key risks include lower-than-expected sales volume, GPM declines (especially for NEVs), and industry sector de-rating. * Potential for missed profit guidance if NEV demand or pricing pressures worsen. #### Key Figures: * Revenue YoY growth: 10.3% (2021A) to projected 17.6% (2024E); Net profit growth: 0.9% (2023A) to 26.1% (2024E). * Improved ROE to 8.0% (2024E), reflecting stronger operational efficiency.

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