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<Research> Citi: GEELY AUTO (00175.HK) Only Carmaker to Post QoQ Profit Growth in 1Q; More Catalysts May Emerge in 2Q
Recommend 13 Positive 18 Negative 7 |
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Citi said in a research report that GEELY AUTO (00175.HK) reported 1Q core profit (excluding forex) rising 31% YoY to RMB4.56 billion, in line with expectations. The broker noted that Geely was the only major automaker to record QoQ profit growth during the period. It maintained a Buy rating with a TP of HKD30. Citi added that Geely's 1Q revenue rose 15% YoY to RMB83.8 billion. New energy vehicle sales increased 9% YoY to 369,000 units, while overall market share improved to 12%. Total exports surged 1.26x YoY to 203,000 units, including 125,000 new energy vehicles, which skyrocketed 5.72x YoY. Gross margin expanded by 1.8 ppts YoY and 0.6 ppts QoQ to 17.5%, driven by improved export contribution and premium sales mix. Administrative expenses fell 6% YoY, while R&D expenses rose 38% YoY and selling expenses increased 20% YoY. Operating profit, including one-off items and forex losses, amounted to RMB4.72 billion, down 25% YoY but up 41% QoQ. The broker estimated core EBIT margin improved to 10.7%, up 2.3 ppts QoQ and 1.9 ppts YoY. Total profit reached RMB4.17 billion, down 27% YoY but up 11% QoQ. Net cash at quarter-end increased 42% YoY to RMB46.6 billion. Total inventory fell 20% QoQ, decreasing by RMB6.5 billion; accounts receivable rose 22% QoQ, increasing by RMB4.3 billion; and accounts payable declined 9% QoQ, decreasing by RMB7.1 billion. Citi listed several potential catalysts for 2Q, including further production ramp-up of Zeekr 8X to improve gross margin, the May launch of Zeekr 009, as well as Lynk & Co 900 and Lynk & Co 10 in May. These are expected to support continued QoQ gross margin expansion into 2Q and 3Q. In addition, the launch and growth of Galaxy A7/M7/Xingyao 7 are expected to drive sales growth. The application of its i-HEV technology in mass-market vehicles will help Geely further capture global and domestic market share before 2027. (ad/da) This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. Auto-translated by AI AASTOCKS Financial News |
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