Introduction: After a period of volatility, Geely Auto seems to have adjusted to its position. In particular, the personal views expressed by Geely executives on the company's "stock price myth" seem very convincing.
There was no first time to write, the analysis of Geely Automobile's financial report, mainly to see under the dual influence of the epidemic and the international situation, Geely Automobile in the period after the release of the financial report, how the company moved, and how the capital market reacted to it.
From the perspective of the stock price that investors are most concerned about, Geely Automobile has generally shown a volatile trend after the release of its performance.
After 2018, there have been many doubts about Geely Automobile, whether it is the automotive industry or the capital market. For example: why didn't a good hand in the new energy sector play well? Why is the growth rate of new car sales weak compared to competitors? Investing in so many sectors, is the capital chain safe? ...... There is also what investors are most concerned about: what is the situation of Geely Automobile's stock price?
Indeed, compared with the old rivals and the new forces of car manufacturing, Geely Automobile seems to be not so fast in the field of new energy, and the capital market has not taken the "rocket"; but in the financial report of Geely Automobile on March 23, 2022, as well as the performance communication meeting, to some extent, it has given people a glimpse of a traditional "new force" that has accumulated a lot of money.
Geely Automobile, whose net profit has been affected by equity incentive fees, does not seem to have been abandoned by investors in the capital market, and many brokerage institutions are also optimistic about it. After the release of the 2021 annual financial report, more than 15 institutions paid attention to Geely Automobile.
1) Is the financial report OK?
In 2021, Geely Automobile's sales volume was 1.328 million units, a slight increase of 1% year-on-year; operating income was 101.61 billion yuan, an increase of 10% year-on-year, returning to the 100 billion club (Geely Holding Group was about 350 billion yuan); net profit was 4.847 billion yuan, a year-on-year decrease of 12.4%, but the net profit excluding share payment reached 6.06 billion yuan, an increase of 9.4% year-on-year.
Not only that, the improvement in the product structure brought by China Star Series, Lynk & Co and Extreme Kr has also improved the profitability of Geely Automobile, and the overall gross profit margin has risen to 17.1%.
From this point of view, the revenue growth rate and profit growth rate converge, reflecting that the company is generally in the rising stage, and the revenue growth rate is greater than the sales growth rate, which also shows the recovery of Geely Automobile's performance.
In the past year, looking at the Chinese auto market, due to multiple factors such as the epidemic, lack of core, and soaring raw material prices, the seemingly beautiful financial reports of some car companies are mainly due to the "disappearing quarter" in 2020; and the car companies that perform poorly actually account for the majority. After all, if the huge amount of government subsidies is removed, the performance of many car companies after deducting non-deductions may be beaten back to the original shape.
Back to geely automobile's financial report itself, in addition to the important basic data mentioned earlier, it is not difficult to find that in 2021, geely automobile's total cash level will reach 28 billion yuan, an increase of 46% year-on-year; among traditional automobile companies, it belongs to the upper middle level. From the balance sheet, the company's asset-liability ratio is 47.73%, although it is higher than in 2020, but it belongs to a very healthy range.
Last year, Geely Automobile invested 5.518 billion yuan in research and development, an increase of 48% year-on-year; of which the amortization of intangible assets (capitalized research and development costs) was 4.225 billion yuan. Of course, this is only the listed company part, because there is also a holding group, so Geely's research and development can be shared horizontally within the group, playing a synergistic effect, and the amount will be larger.
It is also noteworthy that in the 2021 financial report, Geely Automobile's R&D and related technical support service revenue reached 3.25 billion yuan, while the intellectual property licensing revenue reached 1.275 billion yuan, an increase of 125.4% year-on-year.
In this regard, Li Donghui, CEO of Geely Holding Group, said that technology licensing has become a new profit growth point of Geely Automobile, and the product output to technology output, diversified profit structure and leading technical level also ensure Geely's high-quality development; with the expansion of the number and scope of authorization of Geely Automobile's technology licensing and R&D cooperation brands, Geely will not only be China's leading export brand, but also become the leader of China's automotive technology exports.
However, as of the end of last year, Geely's current ratio of automobiles declined, about 1.08. At the same time, its sales expense ratio and administrative expense ratio have risen slightly.
Auto K Line believes that compared with traditional competitors and new car-making forces, the financial report disclosed by Geely Automobile is generally remarkable, after all, this is the answer sheet handed over by Geely Automobile under the "triple pressure" (one is the challenge of the epidemic, cost and supply chain; the second is that the core products are in a period of comprehensive transformation and upgrading; the third is to accelerate the transformation to new energy vehicles, while expanding the layout).
Last year, Volvo was listed in Stockholm, Sweden, to some extent, although it was not incorporated into Geely Automobile, many investors felt some regrets, but it also indirectly benefited Geely Automobile, and Geely could have more energy for strategic transformation.
2) Stock price myths
In the past 6 years, Geely Automobile's stock price has generally experienced "two ups and two downs": the first time is that Geely ushered in a product outbreak period, the Lynk & Co brand was born, and the stock price increased by nearly 10 times in less than two years; the second time appeared at the beginning of last year, the Chinese auto stocks that came out of the haze of the epidemic have experienced a wave of sharp rise, and geely motors have fallen back to near 10 Hong Kong dollars, the stock price has soared more than 3 times in one breath, and some institutional brokers have even given Geely Automobile stock price expectations to reach more than 60 Hong Kong dollars.
However, affected by the world situation, macroeconomic environment, industrial industry policies, and fluctuations in the automobile market, Geely Automobile's stock price fell back to HK$10 per share on March 15 this year. Including the soaring Great Wall Motors, Ningde Times, Xiaokang shares, as well as new forces such as Ideal and Weilai, almost none of them are spared. According to the "Auto Stock Rise and Fall List" of the auto K line, since the end of last year, the market value of more than 70 listed companies in the auto industry has evaporated by more than 2 trillion yuan.
However, investors for Geely Automobile, inevitably love and hate, love is this Chinese private car company leader, has hard power, bright prospects; hate is Geely Automobile stock price valuation, love can not help. Always when giving people hope, suddenly come a little "small scare", let the shareholders fall into a myth.
Due to the epidemic, this year's geely automobile's financial report performance communication will be held online, but this has not prevented the performance conference from receiving widespread attention, and in response to the valuation and prospects of geely automobile, the senior management of Geely Automobile Holdings Co., Ltd. also expressed their views, which has also become the shining point of the performance communication meeting.
"From the perspective of the company itself, I believe that there is a big gap between the current valuation level of Geely Automobile and the actual value of the company." Perhaps, from the views of Gui Shengyue, CEO of Geely Automobile Holdings Co., Ltd., investors can get an answer to the myth of Geely Automobile's stock price.
From the perspective of the future development of the global travel market, the automotive industry will continue to grow steadily, so the automotive industry still has long-term investment value. In China, the world's largest automobile market, as a national strategic pillar industry and industrial mainstay, after the empowerment of new energy and intelligence, the future investment value of the automobile industry is still huge.
"Focusing on Geely Automobile itself, the '4.0 era' product layout will gradually enter the harvest period, especially the CMA, SPA and SEA (Vast Framework) built by Geely in the past few years, which will be fully reflected this year." Gui Shengyue believes that these embodiments will greatly improve the sales and revenue of Geely Automobile, which will further open up the space for value upwards and enhance the premium ability of the brand.
In fact, in 2021, the high-end brand Lynk & Co revenue increased by 26.6%, net profit exceeded 700 million yuan, an increase of 36.9% year-on-year, the average price of the brand exceeded 130,000 yuan, which led to a price of more than 150,000 yuan of products, accounting for the overall proportion of Geely Automobile Group from 11% to 22%, 100,000 to 150,000 yuan of products The proportion of products reached 44%, and products within 100,000 yuan have been greatly reduced from 64% to 34%.
Third, in the past few years, in terms of intelligence and electrification, Geely Automobile has carried out a series of scientific and technological ecological layouts, which will feed back the consumer market, and at the same time form a solid technical moat of Geely, laying the basic plate for the long-term development of Geely Automobile.
Gui Shengyue pointed out that in the global auto industry is very concerned about the new four modernizations of the automobile, people can compare at will, geely and the new forces to do the layout, whether in terms of scale, or depth, is not at a level, I believe we are more in line with the needs of development.
In the past 10 years, Geely Automobile has gone from public travel, high-speed rail, telecom 5G, to flying cars, commercial satellites, mobile phone manufacturing, chip design and development... Almost all areas related to the automotive industry have an in-depth layout.
Fourth, as technology licensing revenue becomes a new profit growth point for enterprises, a company can go from product output to technology output, which is the embodiment of the company's technical capabilities and highlights the value of Geely Automobile. In previous decades, chinese auto companies had been paying exorbitant technology transfer fees to multinational auto giants, and now that has fundamentally changed.
Fifth, in the international market, Geely Automobile has been actively laying out. In the long run, relying on the global cooperation system built in the past decade or so, Geely's internationalization may show explosive growth. From the British Isles to Indonesia and the Philippines, from Europe to Asia, from the Americas to Africa, geely's pace of pioneering has never stopped.
Finally, with the passage of time, the world capital market will look at the automotive industry more comprehensively and rationally, and will realize that a dynamic traditional automobile enterprise will be greatly reflected in meeting the challenges of the new four modernizations and in all aspects of the challenges. Once this advantage explodes, there will be a fundamental change in the level of valuation of a car company. In fact, since last year, the valuation of the automotive industry has begun to change quietly.
3) New energy "speed up"
For Geely Automobile, it actually belongs to a wave of automobile listed companies in the field of new energy vehicles earlier; but on this road, there are also thorns. From the very beginning of the current, to cautious wait-and-see, to seriously involved in the layout, Geely's new energy road, can be described as twists and turns, full of complexity.
In 2019, Geely Automobile launched the best pure electric vehicle in the Eastern Hemisphere in Singapore, but due to multiple factors, it turned to the B-end market, and the C-end regretted to fold.
Until 2021, with years of continuous exploration and technological research and development accumulation, Geely Automobile has penetrated into this market that currently seems to be developing too fast and is difficult to predict, from which it has gradually clarified the development ideas of traditional cars, energy-saving vehicles and new energy vehicles, and discovered the order and opportunities in chaos and complexity.
After two years of dormancy and questioning, in 2021, Extreme Krypton came out with a high profile, and sold more than 6,000 vehicles in more than 2 months last year. The geometric brand has fully returned to the C-end market after the B-end market has been frustrated due to the epidemic, and has formed a matrix of medium and high-end brands and products with the extreme krypton brand. Coupled with Geely's power exchange brand Ruilan Automobile, in terms of pure electric vehicles, Geely's strategic layout is basically completed.
Gan Jiayue, CEO of Geely Automobile Group, said that in order to accelerate geely's comprehensive transformation to new energy, we will comprehensively empower and upgrade the sales network with new energy, open up geely main network dealer resources, concentrate superior resources, strengthen and expand geely geometry pure electricity sales network, and increase channel coverage.
In terms of the Krypton brand, although some achievements have been made, An Conghui, CEO of Extreme Kr Intelligent Technology, believes that what The current Krypton has to do is to sincerely face the existing problems, especially in the field of supply delivery and software, which needs to be greatly improved. After all, in the market, the opponent of krypton is not only Tesla, but also new forces and traditional car giants.
In the next three years, Krypton will have two new cars on the market every year. By the end of 2021, Extreme Kr has 69 delivery experience centers, with more than 300 planned by the end of this year.
Not only that, geely and Mercedes-Benz cooperation in the field of new energy has also achieved the latest results. On April 25, the first pure electric vehicle of Smart, a joint venture between Geely and Mercedes-Benz, was launched at a price of about 200,000 yuan. In the future, products developed based on the SEA Framework will be used in multiple brands.
Previously, Geely also had a forward-looking layout in the field of electric commercial vehicles. It is not difficult to find that compared with many automobile companies forcibly increasing the size of pure electric, the overall strategy of Geely Automobile is more like a natural success. However, Geely Automobile's new energy strategy is far more than that.
In the view of the automotive K line, although new energy vehicles are a national strategy and are in a rapid stage of development, there has been a potential overcapacity, as well as the risk of blind expansion of capital, so next, the coexistence and development of energy-saving and new energy vehicles may be the right way for the development of China's automobile industry.
4) "Thor" is coming
In the view of the automotive K line, the most important thing for Geely Automobile in 2021 is the release of "Thor Power", which will bring qualitative improvement to the overall core competitiveness of Geely Automobile in the next 5 to 10 years.
At present, many people under the advocacy of some new forces believe that fuel vehicles have been "thinning", it is indeed undeniable that the market share of pure electric vehicles in China and even the world is increasing rapidly, but do not forget that fuel vehicles still occupy an absolute dominant position. What's more, the sales of very energy-efficient gasoline-electric hybrid vehicles are also growing rapidly.
Therefore, the share of pure fuel vehicles may decrease rapidly, but energy-saving and new energy vehicles composed of HEVs, PHEV and range extenders will become the mainstream. Looking at global auto companies, whether it is a traditional car company or a new force, it can have a fully electrified path, and the technology is relatively strong, at present, in addition to Japan's Toyota Motor, it is the domestic Geely Automobile. Previously, Geely Automobile had a deep cooperation with Toyota Motor.
It is noteworthy that Toyota is currently increasing its hybrid vehicle (EV) presence in China and the U.S., investing hundreds of millions of dollars in HEV production capacity, and in China, its joint venture with Corun to produce 480,000 units/sets of HEV system components has also been put into operation.
As the saying goes, blue is better than blue. After the release of the HEV model by Hoshigoe L, Geely Automobile's hybrid technology is accelerating the layout.
Compared with the traditional PHEV and EV, the "super hybrid" launched by Raytheon not long ago has a pure electric mileage of more than 100km, which also includes models with a pure electric range of more than 200km.
Taking the Emgrand L "Super Mix" that went on sale in April as an example, its power loss fuel consumption is only 3.8L, and the comprehensive limit endurance is more than 1300km.
In order to increase efforts to promote Geely's "super mix", Thor super mix will fully empower Geely's main sales network G network and L network, and Geely's new energy transformation has entered a new era.
However, automotive K-line believes that before this, Geely Automobile needs to continuously increase its efforts to spread the "super electric hybrid" technology so that the best technology can be experienced. At least for now, BYD has tasted the sweetness of "super hybrid" (PHEV), and the two giants of Japan have monopolized the HEV market. Whether Geely Cars can be the first to arrive later makes people have a vague expectation.
After all, from the perspective of technical strength, Mercedes-Benz in Germany and Renault Group in France may deepen cooperation with Geely. Of course, this also needs to look at the market performance of Geely Automobile's products equipped with new technologies.
According to the planning of Geely Automobile Group, in 2022, Geely will launch 5 Thor "super electric hybrid" models, 3 Raytheon oil-electric hybrid models, and a alcohol-electric hybrid model. In terms of new energy vehicles, The first pure electric MPV and geometric brand pure electric SUV of JiKr will also be listed; and the Geely brand will launch two new SUVs.
How can such a Geely car not make investors look forward to it. The question is whether the epidemic can give some face.