Smart finance APP learned that Huachuang Securities released a research report stating that it maintains a 'strong recommendation' rating for Geely Auto (00175), making minor adjustments based on sales and industry conditions, adjusting the company's net profit attributable to the parent for 2024-2026 to 15.1 billion, 11.8 billion, and 15.1 billion yuan. Considering the company's overall positive operation and the recent strong performance in the Hong Kong stock market, a target price range of 16.5-18.9 Hong Kong dollars is given. The company's transformation towards electrification is on the right track this year, with further acceleration in the second half of the year. Galaxy, Lynk & Co, and Zeekr, the three major brand series, have achieved operational highlights and good future prospects, expected to drive the company's volume and profit growth. On October 23, Zeekr MIX was officially launched, with the smart driving version starting at 0.2799 million yuan, and the long-endurance smart driving version starting at 0.2999 million yuan.

Huachuang Securities' main views are as follows:

Zeekr MIX, as a new species of electric intelligent vehicle, showcases Geely's car manufacturing strength.

Zeekr MIX is an unconventional vehicle model, similar to Volkswagen's ID BUZZ, mainly targeting young family users with demand for electric intelligence, space, innovation, and multi-functional, multi-person travel in the 0.2 million yuan price range. From a quantitative perspective, it can cover around 0.2-0.3 million yuan MPVs, about 0.16 million units/year, as well as some 0.15-0.25 million yuan SUVs with six seats or more, about 0.34 million units/year, totaling an estimated market of 0.5 million units/year. Typical competitors include the Buick GL8 in the MPV segment (0.005 million units/month), Xiaopeng X9 (0.002 million units/month), etc., or the 0.2 million yuan-level six-seven-seat SUV Toyota Highlander (0.007 million units/month). Features of the car include: 1) Exterior: equipped with an industry-first hidden double B-pillar electric swing door design. 2) Cabin: with the largest 6.3 square meters cabin space in its class, as well as the most cabin scene modes in the industry. 3) Platform: built on the new SEA-M platform, balancing space and handling performance. 4) Smart Driving: Zeekr's independently developed expansive intelligent driving 2.0 system, equipped with the OrinX chip.

The company's electrification and intelligent transformation will accelerate comprehensively in the second half of the year, demonstrating the advantages of the group's all-round resource layout, with the potential to achieve both volume and profit growth in the future.

Although Zeekr MIX is a niche model, it still demonstrates Geely's relatively leading concept and strength in vehicle manufacturing. In the second half of this year, as Geely's new cars are intensively released, including the Galaxy E5 (GEA architecture model), the Zeekr 7X gaining popularity, and the Xingyuan (GEA architecture new car), bringing in new volume for the company. In addition to Zeekr MIX, the next two months are expected to see a new car each from Galaxy and Lynk & Co (Galaxy Starship 7 and Lynk & Co Z20). The successful launch of Galaxy and Xingyuan reassures the market of the cost and pricing advantages of Geely's new platform models, as well as the competitiveness after partnering with Meizu's Flyme Auto car system; the simultaneous increase in orders and deliveries of Zeekr 7X showcases Zeekr's competitiveness in the mainstream car market. Looking forward to 4Q and next year, Geely is set to benefit from the group and its subsidiaries' comprehensive resource layout in globalization, self-developed intelligent driving, car-machine, chip, and other aspects, and is expected to win a favorable position in core growth highlights such as going global and intelligent competition.

With the increase in the number of electric smart vehicles, it is expected that the company's sales volume and operational performance will grow rapidly in the next two years to defend its position in the industry.

Based on the industry situation and the outlook for Geely models, the industry estimates that Geely's total sales volume for 2024-2026 will be 2.17 million, 2.55 million, and 2.86 million units, with a year-on-year increase of +29%, +17%, +12%, and the proportion of new energy vehicles accounting for 38%, 53%, and 59% respectively. Benefiting from the competitive enhancement and scale increase of the three major electric vehicle brands/series products, it is expected that the company's profitability will continue the rapid improvement trend of the first half of the year. It is estimated that the company's net profit attributable to shareholders for 2024-2026 will be 15.1 billion, 11.8 billion, and 15.1 billion yuan, excluding the net profit attributable to shareholders calculated without considering the asset sales income in 2024, which will be 7.6 billion, 11.8 billion, and 15.1 billion yuan, with growth rates of +47%, +56%, and +27%.