Geely Automobile (GELYF, Financial) has announced its intention to privatize its subsidiary Zeekr, nearly a year after Zeekr went public in the United States. The plan involves acquiring all issued and outstanding shares, including American depositary shares, of Zeekr. According to Geely, this strategic move aims to enhance the integration of internal resources, streamline operations by cutting redundant investments, and ultimately reduce costs. This initiative is expected to increase competitiveness and deliver long-term value for the company. Geely has proposed a valuation of Zeekr at $2.566 per share for this transaction.
GELYF Key Business Developments
Release Date: March 20, 2025
- Sales Volume: 2.177 million units, a growth of 32%.
- Total Revenue: RMB 240.2 billion, a growth of 34%.
- Profit Attributable to Equity Holders: RMB 16.6 billion; excluding extraordinary items: RMB 8.5 billion.
- New Energy Vehicles (NEV) Sales: 888,000 vehicles, a growth of 92%.
- Export Sales: 415,000 vehicles, a growth of 57%.
- Average Unit Price: RMB 107,000.
- Gross Profit: RMB 38.2 billion.
- Gross Profit Margin: 15.9%, an increase of 0.6%.
- Sales and Administrative Expense Ratios: Reduced to 5.5% and 2%, respectively.
- R&D Investment: RMB 15.9 billion, accounting for 60.6% of sales revenue.
- Operating Cash Flow: RMB 26.5 billion.
- Total Cash Level: RMB 40.9 billion at the end of 2024.
- Net Cash Flow: RMB 39.8 billion.
- Proposed Dividend Per Share: HKD 0.33, a 50% increase year-on-year.
- Geely Brand Sales: 1.67 million vehicles, a growth of 27%.
- Geely Galaxy Sales: 494,000 units, an 80% growth.
- ZEEKR Sales: 222,000 units, an increase of 83%.
- Proton Sales: 153,000 units, contributing RMB 95 million.
- Renault Korea Sales: 110,000 units, contributing RMB 121 million.
- Genius AFC Net Profit: RMB 1.07 billion.
- Loan Scale: RMB 54.8 billion.
- ESG Performance: Emission per vehicle decreased by 18% from 2020 levels.
- 2025 Sales Target: 2.71 million units, with NEV sales target of 1.5 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Geely Automobile Holdings Ltd (GELYF, Financial) achieved a record sales volume of 2.177 million units in 2024, marking a 32% increase.
- The company's total revenue grew by 34% to RMB240.2 billion, with a significant contribution from new energy vehicles (NEVs), which saw a 92% increase in sales.
- Geely's gross profit margin improved to 15.9%, driven by scale effects and high-value products.
- The company has a strong cash position with RMB40.9 billion in total cash at the end of 2024, supporting its strategic initiatives.
- Geely's international expansion is robust, with a 57% increase in exports, and plans to further penetrate key markets like the Middle East and Europe.
Negative Points
- Despite the growth, Geely acknowledges a gap between itself and the top new energy vehicle brand in China.
- The company faces intense competition in both domestic and international markets, which could impact future profitability.
- Geely's R&D investment, while significant, still accounts for a substantial portion of sales revenue, indicating ongoing cost pressures.
- The company is in the early stages of its strategic transformation, with product matrix optimization still needed for new energy vehicles.
- Geely's reliance on the success of its smart driving and AI initiatives poses a risk if these technologies do not meet market expectations.
