On November 14, 2023, Geely Automobile, listed as 00175.HK, alongside its subsidiary Zeekr (ZK.US), announced its latest quarterly earnings report featuring remarkable growth figures. This announcement immediately influenced market activity, leading to a brief surge in Geely's stock price which shot up nearly by 4% before a subsequent decline, ultimately closing down by 1%. In a related movement, Zeekr's stock reflected a dip of over 1% during the pre-market trading hours on the same day.
The financial statistics delivered in Geely's report were noteworthy. Over the first three quarters of 2024, the automobile giant registered sales volumes soaring by 32% year-over-year, amounting to nearly 1.49 million vehicles. This outstanding performance not only outpaced the broader market trends, but it also indicated that the company had already met 74.49% of its annual target of 2 million vehicles. Particularly striking was the explosive growth in their new energy vehicle (NEV) segment, which recorded a remarkable increase of over 93%, totaling 545,900 units sold within the same period. This surge signifies not just a shift in consumer preferences toward sustainable mobility solutions, but also reflects Geely's strategic positioning within the burgeoning NEV market.
In the context of international sales, Geely's overseas exports reached a phenomenal total of 314,000 vehicles from January to September 2023, marking a 68% increase compared to the previous year. This figure significantly surpassed the automotive export growth rate of 24% published by the China Association of Automobile Manufacturers, underscoring Geely's strong global market presence.
Financially, Geely's performance was equally robust. The company achieved revenues of approximately 167.68 billion yuan in the first three quarters of 2024, which is a 36% rise year-over-year. Furthermore, it reported a net profit attributable to shareholders of about 13.05 billion yuan, marking a staggering 358% growth compared to the same period last year. Such figures are indicative of Geely's concerted efforts towards operational efficiency and scale economies.
Looking more closely at the third quarter alone, Geely managed to sell 534,000 vehicles, an all-time high for the company, despite a growth rate of 19% that was relatively lower than the year-to-date performance. Particularly, NEV sales during this quarter reached 225,700 units, reflecting a substantial increase of 67% year over year. The company also experienced a remarkable boost in export volumes, totaling 116,600 vehicles, representing a 71% increase from the previous year's figures.
In the revenue breakdown, Geely's third-quarter revenue was reported at 60.38 billion yuan, representing a 20% increase year-over-year and setting a new record for a single-quarter performance. Additionally, the net profit for the same period rose to 2.46 billion yuan, up by 92%. Such profitability is largely attributed to improved operational dynamics and scale effects.
Alongside Geely's robust financial performance, Zeekr, its premium intelligent electric vehicle brand, also unveiled its performance metrics on November 14. Zeekr’s sales for the first three quarters surged by an impressive 81% to 142,900 units, significantly outperforming Geely’s overall growth rate. Zeekr's revenue also saw a spectacular growth of 50%, amounting to approximately 53.14 billion yuan, with vehicle revenue alone surpassing 36 billion yuan. On the other hand, Zeekr's balance sheet displayed a net loss attributable to shareholders of nearly 5.43 billion yuan.
Within the third quarter, Zeekr achieved a quarterly delivery milestone, surpassing 55,000 units—a 51% increase year-over-year, which marked its highest figure yet. The third-quarter revenue for Zeekr stood at around 18.36 billion yuan, indicating a solid 31% increase, with vehicle revenue surpassing 14.4 billion yuan—an impressive growth of 42% compared to the previous period.
Zeekr’s gross profit margin for vehicle sales hit 15.7%, marking a new peak for the year. In an encouraging sign, the company managed to narrow its net loss further, reporting a loss of approximately 1.23 billion yuan for the third quarter, while still balancing its books according to Hong Kong financial reporting standards.
Overall, the quarter reflected a successful period for Zeekr, signifying a commendable performance that aligns with the growing demand for electric vehicles. Zeekr's president, An Conghui, credited their success to stringent cost controls and ongoing optimization of the product portfolio, which have significantly enhanced operational efficiency. The company plans to continue consolidating resources to strengthen product competitiveness and pursue sustainable high-quality growth.
In October alone, Zeekr set a new monthly record with over 25,000 deliveries, reflecting a remarkable 92% year-over-year increase and a 17% month-on-month rise. By the end of October, Zeekr had cumulatively delivered 167,900 units for the year, a surge of 82% from the prior year.
In an exciting development, Geely recently revealed intentions regarding a significant restructuring move involving their brands Lynk & Co and Zeekr. Announced post-market on November 14, Geely and Zeekr are considering acquiring shares from Lynk & Co, a joint venture that will see Zeekr acquire 20% of Lynk & Co’s shares from Geely Holdings and an additional 30% from Volvo, valued at approximately 3.6 billion yuan and 5.4 billion yuan, respectively. Post-acquisition, both Geely and Zeekr will hold equal stakes of 50% in Lynk & Co.
Moreover, Zeekr is set to inject further capital into Lynk & Co post-acquisition to increase its ownership stake to 51%, while Geely will continue to retain the remaining shares. This transaction is projected to finalize in June 2024.
In a separate announcement, Geely also disclosed its plan to acquire 11.3% of Zeekr’s shares from Geely Holdings for around 806 million dollars, boosting its total stake in Zeekr to about 62.8% upon completion.
Geely anticipates that these acquisitions will foster collaborative development among their brands, enhance innovative capabilities, and ultimately create long-term shareholder value. However, despite the positive long-term implications of this consolidation, the immediate reactions in the stock market have been relatively subdued, suggesting cautious investor sentiment towards corporate restructuring amidst a fast-evolving automotive landscape.