[HONG KONG] Geely Automobile Holdings’ full-year profit more than tripled, beating analyst estimates, after the carmaker increased sales volumes and reduced costs to better compete in the cut-throat Chinese market.
Net income surged 213 per cent to 16.6 billion yuan (S$3 billion), the Hong Kong-listed arm of billionaire Li Shufu’s auto empire said on Thursday (Mar 20). That topped the 14.6 billion yuan profit expected by analysts. Revenue climbed 34 per cent to 240.2 billion yuan in the 12 months ended Dec 31, the company said.
Profits were helped by a one-time gain on the deemed disposal of subsidiaries. Excluding the impact of the gain and other non-recurring losses, net income would have been 8.52 billion yuan, a 52 per cent increase. Shares rose 1.5 per cent.
Vehicle sales rose 32 per cent to 2.1 million units last year, including the Zeekr and Lynk & Co brands. Several of its new electric models such as the Xingyuan hatchback are proving popular with customers, outselling rival BYD’s Seagull in some months.
“Geely has caught up to the pace of the China auto industry’s development and found our footing,” executive director Gui Shengyue said at a briefing. The company expects continued profit and has no need to tap capital markets for funds, he said.
The results come amid a major overhaul for the automaker. After more than a decade of expansion, Li, whose empire also includes Europe’s Volvo Car, electric car maker Polestar Automotive Holding and the UK’s Lotus Technology, last year set out a new strategy that focuses on consolidation and cost-cutting.
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One of the first moves was to combine Zeekr and Lynk & Co to eliminate overlap between the two brands and reduce costs. Under the new organisational structure, each will have distinct pricing categories to reduce cross-competition with Zeekr to focus on cars that start from 300,000 yuan and Lynk & Co targeting vehicles in the 200,000 to 300,000 yuan range.
The automaker is simultaneously dealing with intense competition in China, led by BYD, and an uncertain global environment as tariffs and sanctions against Chinese-made cars grow.
While full-year exports climbed 57 per cent to a record 414,522, Geely and its peers face tariffs in markets such as Europe, Turkey and Canada. Chinese automakers are also effectively shut out of the US due to a more than 100 per cent import tax on cars and a ban on smart electric vehicle technology.
At home, it’s trying to catch up to top-selling BYD, which has been relentless in launching new features, such as affordable smart driving tech for most of its vehicles and a new battery and charging system that’s capable of providing around 400 kilometres of range in five minutes.
Geely has also been investing in similar smart-driving technology, according to Gui, who said the company’s priority is safety and they will not roll out features prematurely or have their customers be “guinea pigs”.
Its overall gross margin increased by 0.6 percentage points to 15.9 per cent as a result of economies of sales, improvement in product mix and cost control, according to the statement.
US-listed Zeekr said on Thursday that its full-year net loss narrowed to 6.4 billion yuan in 2024 from 8.35 billion yuan a year earlier. Revenue climbed 47 per cent to 75.9 billion yuan and vehicle margin improved to 5.6 per cent from 15 per cent. BLOOMBERG
