Maintain "Buy", and raise TP to HK$24.00. Considering that 1) GeelyAutomobile (“Geely”, or the “Company”) has been achieving remarkable results inits transformation of NEVs, with 2025 a big year of its NEV launch, thereby Geelyis expected to further accelerate its NEV transformation to improve profitability; 2)the product matrix has been further strengthened, and Zeekr, Galaxy and Lynk &Co. will work together to jointly push the sales of mid-to-high-end brands to ahigher level; 3) Geely's sales in some overseas markets continue to makebreakthroughs, and it sells cars in markets on all continents around the world, weraise Geely’s EPS forecasts in 2025F-2027F to RMB1.516 (+0.161)/ RMB1.814(+0.204)/ RMB2.251 (+0.346). We give the Company 14.8x 2025F PER,corresponding to a TP of HK$24.00, and maintain "Buy" rating.
　　Single-quarter revenue hit record high; GPM grew yoy, mainly due to salesgrowth and significant results of NEV transformation. The Company's1Q2025 revenue rose by 24.5% yoy to RMB72.5 bn. GPM grew by 0.2 ppts yoy to15.8%. During the period, net profit attributable to the parent company wasRMB5.87 bn, up 321.6% yoy. The Company's 1Q2025 NEV penetration rateincreased by 17.9 ppts to 48.2%. Revenue per vehicle lowered to RMB103,002,basically the same as last year’s, benefiting from the rapid growth in sales of theentire series of NEVs. Geely's NEV strategy in 2025 continued to reap results, with1Q2025 sales of high-end Zeekr brand reaching 41,403 units, up 25.2% yoy. Thesales of the Galaxy Series was extremely strong, with 1Q2025 sales reaching259,709 units, soared by 571.1% yoy. The Galaxy Series has quickly become amid-to-high-end brand.
　　The "One Geely" strategy reshapes competitiveness; the continued salesbreakthroughs of all brands will continue to boost the Company's NEVtransformation. We expect that the annual NEV penetration rate will reach50.0%-55.0% in 2025. In 2025, each brand will continue to launch new SUVs andsedan models, and the Company's product matrix will be further improved. The"One Geely" strategy will continue to pull all its energy to develop various brands,forming a larger economy of scale in terms of supply chain synergy and capacitysharing. In addition, Geely has been accelerating breakthroughs inintelligentization and overseas sales, and we believe that the Company’s businessis embracing a golden new chapter.
　　In 2H2025, Geely's three major brands will strategically expand acrossvarious markets, with more models launching globally, driving an expectedacceleration in overseas sales. Geely's 1Q2025 monthly export sales were29,587 units, up 2.0% yoy, primarily limited by a relatively single lineup of NEVexport models, which restricted market coverage, and the need for deeperorganizational synergy. Despite entering key global markets such as the MiddleEast, APAC, Europe, Latin America, and Africa, Geely's approach has beentailored to specific overseas markets. The Geely brand primarily focuses on APACand the Middle East; the mid-to-high-end Zeekr and Galaxy brands cover most ofEurope; the Lynk & Co brand targets most of Latin America. Under the "OneGeely" strategy, the Company aims to comprehensively roll out its overseas salesmodels and strategically establish sales outlets, collectively driving high exportsales growth in 2025.
　　Risks: 1) domestic industry competition may exceed expectations; 2) overseasmarket expansion may fall short of expectations; and 3) geopolitics may lead to aslowdown in business expansion.