Huaxi Securities: Maintain geely automobile (00175) "buy" rating In January, Extreme Kr delivered more than 10,000 yuan

Zhitong Finance APP learned that Huaxi Securities released a research report saying that maintaining the "buy" rating of Geely Automobile (00175), it is expected that the revenue in 2021-23 will be 110.09 billion / 162.84 billion / 197.63 billion yuan, the net profit attributable to the mother will be 8.12 billion / 13.42 billion / 18.15 billion yuan, and the EPS will be 0.81 / 1.34 / 1.81 yuan. Converted at the RMB Hong Kong dollar exchange rate of 1:0.83, it corresponds to the closing price of 18/11/8 times PE of HK$17.40 on February 10, 2022.

Event: The company announced its January 2022 sales volume: the total wholesale sales of automobiles (including Lynk & Co) in a single month were 146,000 units, completing 8.9% of the annual target of 1.65 million units. Among them: new energy vehicle sales of 17928 units, accounting for 12.2% of the total sales; Export sales of 13,890 units, an increase of 38.5% year-on-year; Sales in the Chinese market were 132,000 units.

The main views of Huaxi Securities are as follows:

China Star hot selling geometric brands continue to grow high

Geely brand sales in January 113,000 units, of which: 1) China Star: January sales totaled 25,000 units, continuing to reach a new high, of which Xingrui sold 12,000 vehicles in January, Xingyue L sales of 11,000 units, continued to climb the slope, Xingyue L Thor Hi · The X oil-electric hybrid version is expected to contribute significant incrementally; 2) Geometry brands: New energy models such as Geometry A and Geometry C sold 10,000 units in January, +391.1% year-on-year.

Lynk & Co brand sales are under pressure Globalization is accelerating

In January, Lynk & Co sold 18,000 vehicles, and the bank judged that it was mainly affected by the lack of cores. Lynk & Co continued to deepen the "European Plan" and "Asia-Pacific Plan", and has normalized exports to Europe and Asia-Pacific, delivering 1,228 vehicles to subscribers in the European market with an innovative subscription model in January. Up to now, the number of registered members in Europe has reached 80,000, and 4 experience stores will be opened in France, Italy and Spain during the year, and the Asia-Pacific plan will land in Oman, the United Arab Emirates, Israel and other places. Continue to explore the international market and attack the "global new high-end brand".

The Krypton brand delivered more than 10,000 vehicles in 2025 with a target of 650,000 vehicles

Extreme Kr 001 began batch delivery on October 23, 2021, and is still in the production capacity climbing period, delivering 3,530 vehicles in January, and the cumulative delivery has exceeded 10,000 vehicles. With the improvement of the market reputation after delivery, orders are expected to accelerate the acquisition, and it is expected that steady-state monthly sales are expected to reach more than 10,000 vehicles. According to the plan, Extreme Kr will launch six new models in the next three years, and aims to sell 650,000 vehicles by 2025, reaching the top three in the world in the market share of high-end electric vehicles. In addition, Extreme Kr and Mobileye have recently further deepened their strategic partnership, and the two companies plan to jointly launch the world's first consumer-grade intelligent driving electric vehicle with L4 level intelligent driving capabilities in 2024.

Ruilan Automobile has set off a new journey to power the power exchange market

On January 24, the company signed an investment cooperation agreement with Lifan Technology to establish a joint venture company - Ruilan Automobile, with a registered capital of 600 million yuan, and the company and Lifan each contributed 300 million yuan, holding 50% of the shares. In the future, Ruilan Automobile will launch a new power exchange brand and a variety of power form products, and plans to build 5,000+ ultra-fast power stations in 2025, covering more than 100 core cities. Based on self-developed power exchange technology, Ruilan Automobile is committed to creating an intelligent power exchange ecology and providing competitive power exchange products and services for the market, with sales of 1683 units in January.

Step into the era of technology 4.0 Electric intelligence helps the brand upwards

The company acquired Volvo in 2010 and successfully integrated, with the help of Volvo to complete the construction of global R & D and supply supporting system, so as to achieve a steady increase in market share under the industry trend of accelerating the impact of independent brands on the joint venture barrier. In the face of the century-old changes in the automotive industry, the company actively responded to changes, announced in 2020 to enter the era of science and technology 4.0, open a comprehensive architecture of car manufacturing, electric intelligent plus layout, release the user brand "we" is expected to use the electric intelligent transformation to achieve curve overtaking, leading the brand to go up. At the same time, we will deepen cooperation with Volvo, merge powertrain to form a new company, jointly develop electric intelligent technology, and share overseas channels to accelerate Lynk & Co's going to sea.

The new product cycle is upward, and the price and interest are increased

The company is ushering in a new round of product cycle, from 2021, the company will accelerate the pace of product development in the field of new energy, SEA Haohan architecture of the first model extreme krypton 001 has been mass production, and a number of models are in research at the same time, will be put on the market one after another. The China Star series continues to climb the hill, and a new car will be launched this year, and steady-state monthly sales are expected to exceed 30,000 units. New product cycle and brand upwards, while globalization is accelerating, in the context of the optimization and concentration of the competitive landscape of the electric intelligent change to promote the industry, the company is expected to achieve a simultaneous increase in volume and price, and the market share continues to increase.

Investment advice

In the short term, new models of CMA, SEA and other architecture platforms are expected to open a new round of product cycles, with volume and price rising, and high performance repair flexibility; In the medium and long term, the electric intelligent transformation gives the company new development opportunities, on the one hand, it can give full play to the advantages of technical hard core, on the other hand, it is expected to achieve curve overtaking in brand power, product definition and innovative marketing, etc., and the market share will accelerate, pointing to international first-line car companies.

In order to better reflect the market value of the company, the segment valuation method is used: 1) Extreme Krypton: it is not profitable at present, and the P/S valuation method is adopted. It is expected that the revenue in 2021-23 will be 3.2 billion / 27.5 billion / 53.5 billion yuan, with reference to the valuation of comparable companies, 8 times the PS for 2022, the target market value will be 220 billion yuan, and the company intends to increase its stake in the extreme krypton to 58%, corresponding to a market value of 127.6 billion yuan; 2) Original business: Using the P/E valuation method, it is expected that the net profit attributable to the mother in 2021-23 will be 8.35 billion / 14.92 billion / 18.51 billion yuan, giving 20 times PE in 2022, with a target market value of 298.4 billion yuan. In summary, the total target market value is 426 billion yuan.