Guotai Junan Securities: Maintains "Buy" rating for GEELY AUTO (00175) as stock repurchase reflects confidence in development

Minsheng Securities released a research report stating that GEELY AUTO (00175) new energy brand is gaining momentum, with accelerating profits. It is projected that the company's revenue for 2025-2027 will be 404.78/489.69/572.83 billion yuan, with a net profit attributable to shareholders of 16.21/22.09/25.97 billion yuan (excluding extreme krypton privatization for now), and EPS of 1.61/2.19/2.58 yuan (excluding repurchase, based on a PE ratio of 10/7/6 times the closing price of 17.77 Hong Kong dollars on November 3). The rating is maintained as "recommended". In October, the company's total wholesale sales volume was 307,000 vehicles, a year-on-year increase of 35.5% and a month-on-month increase of 12.5%; in terms of exports, the company's export sales volume in October was 42,000 vehicles, a month-on-month increase of 2.2%, showing outstanding performance. On October 30, GEELY AUTO launched the new electric hybrid sedan Xingyao 6 under the Geely Galaxy brand. The limited-time introductory price for the launch ranged from 68,800 yuan to 99,800 yuan. Xingyao 6 is equipped with the new generation Thunder God AI hybrid 2.0 system, front electric seats with heating and ventilation functions, as well as the Galaxy Flyme Auto intelligent cockpit and the Qianli Haohan H3 assisted driving system. The company expects sales volume to gradually materialize, while scale-up will boost the profitability of the main brand. On October 6, the company announced plans to implement a share repurchase program with a maximum amount of 2.3 billion Hong Kong dollars. This plan, subject to approval by the Hong Kong Stock Exchange, will be carried out through an automated mechanism in the open market in batches. The repurchase funds will come from GEELY AUTO's existing capital and cash reserves, demonstrating the firm confidence in the long-term development prospects of GEELY AUTO. The repurchase will optimize the capital structure, enhance earnings per share, and help to reasonably reflect the company's valuation. Recently, Geely Technology and GEELY AUTO submitted a CB form to the U.S. Securities and Exchange Commission, and the "Great Merger" between Geely and Geely Technology is expected to be completed by the end of this year. This is expected to push forward the "One Geely" strategy, promoting efficiency improvement and cost reduction.