Geely needs to let the outside world see that it is transforming
Text | Lee Woo Yin
Edit | Zhao Cheng
"Geely Automobile (0175. HK) current valuation level is very different from the actual value of the company. I'm confident that 0175 has a lot of room for improvement. In the face of reporters interviewed, Gui Shengyue, CEO and executive director of Geely Automobile, expressed his determination.
On March 23, Geely Automobile held a media communication meeting for the 2021 fiscal year, the new crown pneumonia epidemic is still raging, this time it is online again; the world is in a period of turbulent change, there is considerable uncertainty in the global macroeconomic trend, and the automotive industry is facing various factors such as rising raw material prices, chip shortages, and plate valuation corrections.
On the same day, Geely Automobile's stock price closed at HK$11.96/share, compared with the price of HK$36.25/share at the beginning of last year, which was a lot of discount. It can be seen that the market sentiment has not yet heated up significantly.
There is both rationality, and the market has not really seen Geely Automobile quietly changing, gradually transforming into a technology company.
Dig deep holes and accumulate grain
Looking at the financial report, the main business is still stable: 1.328 million units, although it did not reach the target of 1.65 million units at the beginning of last year, it still allowed Geely Automobile to maintain the position of the annual sales champion of Chinese brand passenger cars; it is worth noting that Geely Automobile did not choose to exchange price for volume, and the bicycle revenue increased to HK$88,000, an increase of 9.0% year-on-year.
Similar to BMW, Volkswagen and other car companies, Geely Automobile has also adopted a strategy of digging deep holes and accumulating grain. Excluding the impact of the brand's start-up krypton business, profit attributable to shareholders was HK$6.46 billion, an increase of 16.7% year-on-year, compared with the same period last year, while overall gross margin increased to 17.1 and revenue from technical services and licensing services increased by 245.3%.
In addition, total cash rose 46% to RMB28 billion in 2021 and dividend payout ratios rose to 35.3%, both at record highs.
▲ Image source IC
Li Shufu's advance and retreat
In recent years, Li Shufu's name has always appeared in the industrial and commercial information retrieval group such as Qichacha, most of which have faded from the company's directors and supervisors. At this moment, there will be media follow-up posts.
When resigning as a director of Geely Automobile Group, Li Shufu explained the reason: "People will always get old, and I am no exception, but the company can always maintain youth and long-term sustainable development." ”
In fact, in detail, Li Shufu did not simply fade out of the control of the Geely Empire, but unloaded his burden and began to focus more on business involving Geely's future, such as pan-travel and technology territory. If the car is geely's basic disk, the latter determines the ceiling of Geely's future.
Since 2021, after the overall organizational structure of geely has been adjusted, more than one person related to the investment projects under Geely Holdings told Caijing Automobile (ID: caijingqiche) that Li Shufu now has more energy and will focus on some key new businesses.
Therefore, we can see that whether it is the establishment of a mobile phone company, a chip company, or the establishment of a private equity fund with Shen Ziyu, the traditional equity point of view, it is Li Shufu's personal identity directly in charge. He hopes that these new businesses can bring new development space to Geely and seek a new embodiment of growth.
A person close to him once told Caijingqiche: "Li Shufu's layout always has a main line, that is, the travel industry. ”
In the words of Li Donghui, CEO of Geely Automobile Holding Group, vice chairman and executive director of Geely Automobile Holdings Limited, the strategic goal of Geely Holding Group is to strive to become a smart electric mobility and energy service technology enterprise with global competitiveness and influence.
There are already signs of technological empowerment
The financial report shows that the proportion of R&D investment in revenue has increased year by year. In 2021, Geely Automobile's total R&D investment was 5.5 billion yuan, an increase of 16.1% year-on-year, and the total R&D investment in the past five years totaled 25.6 billion yuan.
"2022 is a big year for Geely's products." GanJiayue said that Geely will launch five Thor super hybrid models, three Thor oil-electric hybrid models, one alcohol-electric hybrid model, a new luxury intelligent pure electric MPV of the Extreme Kr brand, two new SUVs of the Geely brand, and a new pure electric SUV of geometry.
Behind the product offensive comparable to the dumplings, Geely Automobile is based on the structure of the car manufacturing force embodiment; with the help of haohan and other structures, Geely can seek the rapid promotion of models, but also to ensure the balance between quality control and cost.
This gives Geely a head start in China and even overseas.
Geely's overseas business is becoming more and more eye-catching, with annual sales of 115,000 units, an increase of 58.2% year-on-year; it is worth mentioning that unlike traditional Chinese cars in emerging countries, and Japanese cars that have produced scale effects, close-to-the-body hand-to-hand combat. Geely has gained a firm foothold by brand power, with Binyue ranking first in the Philippines and Kuwait market segments; Xingyue ranking first in the Saudi Coupe C-class SUV segment; and in Costa Rica, South America, Geely Automobile ranks first among Chinese brands.
In addition, technology licensing has become a new profit growth point for Geely Automobile. Technology output is an important and sustainable direction for future profit sources, from product output to technology output is the embodiment of Geely's technical capabilities.
Led by Extreme Kr, the power of Geely's scientific and technological system has begun to appear
On the day of the press conference, Extreme Kr ushered in its first birthday. "Last year, investors said they couldn't do it, but we succeeded," coincided with the first birthday of the listing of Geely Kr, An Conghui, chairman of Geely Automobile Group, executive director of Geely Automobile Holdings Co., Ltd., and CEO of JiKr Intelligent Technology, revealed the small details behind the average price of 335,000 yuan of Extreme Kr models.
Since its delivery, The Kr 001 has delivered a total of 12,000 vehicles in four months, on the one hand, the powerful hardware parameters have made buyers addicted; on the other hand, the product delivery and software experience are still not up to expectations. At the press conference, An Conghui frankly will enhance the service experience of extreme krypton products by ensuring supply, creating explosive models, and increasing investment in software technology. The company aims to sell 70,000 units by 2022. By 2025, the annual sales target of Extreme Kr is 650,000 units, ranking among the top three in the world in the market share of high-end electric vehicles.
This is part of the smart Geely 2025 strategy, and behind this courage is the scientific and technological attribute support of the entire Dajili system.
"The company will actively respond to the uncertainties brought about by the supply chain, continue to strengthen the deployment of localization and self-developed chips, and solve the chip shortage problem in a multi-faceted manner through a variety of technical route solutions." Gan Jia Yue said.
Behind this, the first domestic 7nm vehicle specification intelligent cockpit chip "Dragon Eagle One" developed by Core Qing Technology under Yijiatong has been successfully produced, and popular models will be installed one after another.
Around the big trip, Geely Holdings continued to increase R & D investment, through the layout of new energy technology, Internet of Vehicles, autonomous driving, low-orbit satellites, on-board chips, operating systems and other businesses, to strengthen the technology ecosystem, to create a technology moat.
Geely Holdings is the only car company in the TOP10 of China's R&D investment in 2021, with a cumulative R&D investment of more than 140 billion yuan in the past decade, more than 20,000 design and R&D personnel, and 26,000 innovative patents. Geely Holdings has become the only automotive enterprise in China with satellite communication and positioning, high-precision maps and navigation, automotive chips to software and hardware full-stack self-development.
After the release of the results, a number of securities companies gave more positive feedback. Guotai Junan (Hong Kong) released a research report saying that although the 2021 performance was less than expected, the decline in performance was mainly due to the increase in stock ownership expenses and research and development expenses, which are crucial to the company's medium- and long-term value creation and optimistic about the company's prospects.
At the end of the day, whoever sees the trend first will see the future first.