Source of this article: Times Finance Author: Lin Qian
On March 23, Geely Automobile Holdings Limited (0175. HK) released its 2021 financial report. During the reporting period, Geely Automobile achieved revenue of RMB101.6 billion, an increase of 10.3% year-on-year, profit attributable to shareholders of RMB4.85 billion and net profit of RMB4.35 billion.
It is worth mentioning that during the reporting period, Geely Automobile's total cash reached 28 billion yuan, a record high, and net cash reached 20.8 billion yuan. Licensing revenue has become a new profit growth point for the company, with annual revenue of up to 1.275 billion yuan, an increase of 125% year-on-year.
According to the data, Geely Automobile's total sales in 2021 totaled 1.328 million units, an increase of 0.6% over 2020, and won the annual sales champion of Chinese brand passenger cars for five consecutive years. With the optimization of product structure and the improvement of profitability, the overall average bicycle revenue of Geely Automobile (including Lynk & Co) was 87,600 yuan, an increase of 9.0% year-on-year.
2021, which can be called the year of the global automotive industry, repeated epidemics and continuous chip tensions have made many car companies face supply chain problems in this year, production cuts and production suspensions are the norm in the industry, and even some well-known large multinational car companies have a certain degree of cumulative sales and revenues last year compared with 2020. However, Geely Automobile withstood the pressure, and the report card handed over was remarkable and full of gold.
Li Donghui, CEO of Geely Holding Group, vice chairman and executive director of Geely Automobile Holdings Co., Ltd., said at the performance meeting that high-end research and development has helped and technology licensing has become a new profit growth point for Geely Automobile. From product output to technology output, the diversified profit structure and leading technical level ensure the high-quality development of Geely Automobile.
Source | Geely Automobile real gold is not afraid of fire refining, and the domestic and foreign markets have blossomed
Chip supply shortage is the main problem facing the global automotive industry in 2021, the situation in 2022 has not changed significantly, how to ensure supply in a period full of variables? Geely Auto gave a textbook answer.
In 2021, Geely Automobile's cumulative sales reached 1.328 million units, an increase of 0.6% over 2020, and it won the annual sales championship of Chinese brand passenger cars for five consecutive years.
At the same time, Geely's overseas markets that have been deeply cultivated for many years are also continuing to exert efforts. According to the financial report data, Eastern Europe, Malaysia and the Middle East have become an important source of Geely Automobile's external income in 2021, and the revenue of the Middle East, Northern Europe, the Philippines, Central And South America, and Africa has doubled. According to the data, in 2021, Geely Automobile exported a total of 115,000 units to overseas markets, an increase of 58.2% year-on-year.
The reason for the above achievements, Geely Automobile Group CEO Gan Jiayue said, this is mainly due to the construction of Geely's mature supply chain system.
Source | Geely Automobile
It is reported that after perceiving the shortage of chip supply and the inability to effectively alleviate the situation in a short period of time, Geely Automobile began to adjust and optimize its own supply chain early. In the early stage, Geely established a daily communication mechanism with a number of original chip factories, and also reached a strategic cooperation agreement with a number of core chip original factories, and some large chip original factories achieved direct supply. In the future, Geely will focus on platform common parts, identify production capacity risks, lock in some core chips, and strengthen the localization of chips and the route of self-developed chips.
It is reported that the joint venture between Geely and Foxconn has been formally established a few days ago, named Shandong Fujikang Intelligent Manufacturing Co., Ltd., the purpose of which is to alleviate the shortage of geely automobile semiconductor chips. In addition, Geely Automobile is also developing chips independently. On October 31 last year, Geely released the first domestic 7nm vehicle-grade intelligent cockpit chip "Dragon Eagle One", breaking the monopoly position of international suppliers in this market and filling the gap in the mainland's independent design of high-end intelligent cockpit platform main chips.
Gan Jiayue, CEO of Geely Automobile Group, believes that "the problem of manufacturing scale, the response to the supply chain end and the ability to control, procurement costs will be very different." The long-term accumulation of mainstream car companies' understanding of the technical depth of the car is also more agile and problem-solving ability."
The "China Star" effect is prominent, and the transformation of new energy is accelerating
Geely's new energy transformation is also accelerating.
According to the data, Geely Automobile's new energy and electrification sales in 2021 exceeded 100,000, of which the cumulative sales of geometric vehicles reached 55,000 units, an increase of 145.3% year-on-year, and the market share of the A-class pure electricity market reached 7.43%, ranking third. Based on the current development trend, it is expected that the overall sales volume in 2022 is expected to exceed 160,000 vehicles.
Since its delivery in October last year, the Extreme Krypton brand, which is positioned as a high-end intelligent electric vehicle, has delivered a total of 12,400 vehicles in four months, with an average order price of 335,000 yuan. An Conghui, chairman of Geely Automobile Group, executive director of Geely Automobile Holdings Co., Ltd., and CEO of Extreme Kr Intelligent Technology, revealed at the performance meeting that at the beginning of the establishment of the brand, some investors questioned the pricing of the Extreme Kr brand of more than 300,000 yuan, "but we did it, the current order exceeded expectations, and it is also the fastest smart electric vehicle brand to achieve 10,000 deliveries."
As a new high-end smart electric vehicle brand, Extreme Kr delivered more than 6,000 new cars last year, while ensuring that its gross profit margin is positive. This also fully shows that in accepting the challenge of the new four modernizations, the heritage of traditional cars is incomparable to the new forces of car manufacturing, and this background will continue to have a positive impact on the growth of extreme krypton.
Geometric automobile, extreme krypton brand has achieved phased results, in 2022 Geely will continue to increase investment in research and development of new energy products, in pure electricity, super mix, alcohol-electric hybrid, power exchange and other tracks in an all-round force. The new power exchange travel brand Ruilan Automobile officially opened Geely's new pattern of power exchange, more than 8 models of Thor Hi · X-oil-electric hybrid and super hybrid products are planned to be put on the market, opening a new pattern of new energy travel.
It is worth mentioning that while accelerating the transformation of intelligent electrification, Geely Automobile is also adjusting its own brand and product structure, and has achieved good results. Judging from the distribution chart of the product market guidance price, this is mainly due to the fact that Geely's selling price is 100,000-150,000 and more than 150,000 products account for 22% of the added value from 11%.
At the product level, the total sales volume of the "China Star" series exceeded 200,000 units last year, realizing the upward development and value leap of the Geely brand. In the same year, Lynk & Co celebrated its fifth anniversary with cumulative sales of more than 650,000 units. The average weighted transaction price of Lynk & Co products reached 165,000 yuan, successfully standing in the core area of the mainstream market, and Lynk & Co 09 has entered the price range of the luxury car market.
"After completing the brand repositioning, the Geely 4.0 era has entered the harvest period. Among them, the Geely brand will achieve structural upward movement with the China Star series, and two new models FX11/FX21 will be listed in 2022, and the revenue of Geely brand bicycles will be significantly boosted. Ping An Securities issued a document saying, "Looking forward to the medium and long term, the company will realize that all models are based on four major platforms, the structure of the car will significantly improve profitability, the brand positioning has been sorted out clearly, the pure electric high-end intelligent brand has achieved the first-mover advantage, and the globalization has been steadily advancing."
Strengthen the layout of the scientific and technological field and consolidate the foundation for future development
"The strategic research of the enterprise must put the research of creativity in the first place, and the enterprise will have vitality." Robert A. Wilver, former Executive Chairman of the World Enterprise Council, wrote in the book Fundamental Strategy of Business.
Looking back at Geely Automobile's performance in the market over the years, the achievements made in the transformation of intelligent electrification and ensuring the supply of chips are inseparable from the insistence on innovation and mastery of core technologies.
Li Shufu, chairman of Geely Holding Group, said in a recent interview, "As far as the automobile industry is concerned, it must be a global industry, otherwise it is difficult to achieve a leading position in science and technology. Today's world economy has changed, and it is changing in reverse, and we must also make corresponding adjustments to adapt to these changes in order for our businesses to survive and develop."
According to the data, in the past ten years, Geely Holdings has invested more than 140 billion yuan in research and development, which is the only car company in the top ten R&D investment of Chinese enterprises last year, with more than 20,000 design and R&D personnel and 26,000 innovative patents. In 2021, Geely Automobile invested 5.5 billion yuan in R&D, an increase of 16.1% year-on-year, and the total R&D investment in the past five years totaled 25.6 billion yuan, and the proportion of R&D investment in revenue showed an upward trend year by year.
The huge R&D investment that has been insisted on for many years is gradually entering the harvest period. At the product and brand level, the brand premium effect of Geely Automobile has gradually emerged. According to the financial report, Geely Automobile's other revenues such as technical services and licensing profits continued to grow, up 245.3% year-on-year.
"With the help of high-end research and development, technology licensing has become a new profit growth point for Geely Automobile." From product output to technology output, the diversified profit structure and leading technical level ensure the high-quality development of Geely Automobile. Li Donghui, CEO of Geely Holding Group, vice chairman and executive director of Geely Automobile Holdings Co., Ltd., said at the performance meeting that in 2021, Geely Automobile's technical licensing and R&D services have achieved 4.5 billion yuan in revenue, an increase of 245% over 2020. Among them, the revenue of technology licensing was 1.275 billion, an increase of 125% year-on-year. At the same time, based on the cooperation agreement with other brands of Geely Holding Group and partners of Geely Holding Ecosystem, Geely Automobile's technical licensing and technical service revenue will maintain a stable growth trend in the future, laying the leading position and brand influence of Geely Automobile in global technology.
Li Donghui added, "At present, practicing the international and domestic dual cycle strategy, Geely continues to deepen the domestic market while continuing to participate in international market competition. With the continuous expansion of the number and scope of Geely automotive technology licensing and R&D service cooperation brands, Geely will not only become the leading brand in China's auto product exports, but also become the leader in China's automotive technology exports."
More than ten years and tens of billions of capital investment, to help Geely Automobile break through technical barriers, strengthen the core competitiveness, the company's voice in the industrial chain is greater, the future Geely will also maintain stable investment in research and development.
"In the future, Geely Automobile will maintain a stable proportion of R&D investment in revenue, maintaining a horizontal line of about 5.5%." Dai Qing, senior vice president and CFO of Geely Automobile Group, revealed that in terms of R&D investment structure, on the one hand, it will increase investment in the field of intelligent software in the future, and on the other hand, it will further enhance and give play to the advantages of modular architecture car manufacturing in terms of cost, quality consistency and efficiency.
According to the "Smart Geely 2025" plan, Geely will continue to promote the company to accelerate its transformation into the new era of four modernizations, build a full-stack self-developed ecosystem in the core technologies of new energy, automatic driving, intelligent networking, intelligent cockpit, etc., and build Geely into a technology-led global automotive enterprise. At present, Geely Holding Group has reached a cooperation with Waymo and Baidu, a world-renowned unmanned driving technology company, and Bikr has deepened its cooperative relationship with Mobileye, the world's leading automatic and assisted driving company, to jointly explore innovative technologies for automotive intelligence.
Guosen Securities Research Report pointed out that it is predicted that Geely Automobile will usher in a new round of high performance growth in 2022, the main reason is: The bottleneck of the supply side is expected to be eliminated in 2022, and the company's product series is expected to fully exert efforts to promote sales growth; the series of new models launched in the company's product 4.0 era are expected to drive the overall competitiveness of the company's products to a higher level, driving sales growth and market share expansion. Specifically, it is predicted that the company's revenue will achieve a high growth rate of more than 25% in 2022, and the growth rate of net profit is expected to exceed the growth rate of revenue.
It is reported that Geely Automobile's sales target this year is 1.65 million units, including 70,000 units of Extreme Krypton. Although the world is currently in a period of turbulent change, the world's macro-economy is full of uncertainty, and the challenges and crises facing the automotive industry have not eased, long-term stable investment in technology has supported Geely to maintain strong competitiveness in future development.