Orient: Maintain a "buy" rating on GEELY AUTO (00175) with a target price of HK$23.79.

Orient released a research report predicting that the consolidated net profit of GEELY AUTO (00175) would be 20.476 billion yuan, 25.942 billion yuan, and 30.809 billion yuan for the years 2026-2028, respectively. It maintains a 26-year PE average valuation of 11 times for comparable companies and sets a target price of 20.79 yuan and 23.79 Hong Kong dollars (1 Hong Kong dollar = 0.8739 yuan). It maintains a "buy" rating. Orient's main points are as follows: - Expected sales growth in April to be better than the industry average In April, GEELY AUTO's total sales were 235,200 vehicles, a year-on-year increase of 0.4% and a month-on-month increase of 0.9%; cumulative sales from January to April were 944,500 vehicles, a year-on-year increase of 0.7%. According to the data from the China Passenger Car Association, wholesale sales of passenger cars in April 1-26 totaled 1.268 million vehicles, a year-on-year decrease of 15% and a month-on-month decrease of 24%, with cumulative wholesale sales of 7.134 million vehicles, a year-on-year decrease of 8%. It is expected that the company's sales growth in April will be better than the market average. - Accelerated overseas expansion, continuous improvement in sales In April, Geely brand sales were 180,600 vehicles, up 1.3% month-on-month; Geely's new energy vehicle sales were 135,600 vehicles, a year-on-year increase of 8.0% and a month-on-month increase of 6.5%, with new energy sales accounting for 57.7%, including Geely Galaxy sales of 91,000 vehicles, a 10.0% increase month-on-month. On April 16, the Galaxy Morning Star 7 started pre-sales, which is competitive in terms of four-wheel drive motor, chassis, exterior, etc., while filling the market gap between the Morning Star 6 and Morning Star 8; the new Galaxy A7 EM and A7EV pure electric models were launched on April 22; and the Galaxy M7 Farfarer's Home was launched on April 28. Overall, Geely's new Galaxy A7 and M7 vehicles have competitive pricing, and it is expected that with the improvement of the Galaxy product portfolio, subsequent sales performance will be good. Overseas, Geely exported 83,200 vehicles in April, a year-on-year increase of 244.7% and a month-on-month increase of 1.9%; cumulative exports from January to April were 286,200 vehicles, a year-on-year increase of 150.9%. The company's overseas layout is accelerating, and on April 21, Geely held an international business partners conference with more than 1,000 dealers from over 100 countries attending. The company will focus on building four markets with more than 150,000 units in Europe, Eastern Europe, ASEAN, Latin America, Africa, and four markets with 100,000 units in the Middle East, Asia-Pacific. The annual challenge is to export 750,000 vehicles, and it is expected that overseas expansion will become the company's core growth engine in 2026. - Lynk & Co sales continue to reach new highs, significant results in high-end development Lynk & Co brand sales in April were 31,800 vehicles, up 131.6% year-on-year and 8.4% month-on-month; cumulative sales from January to April were 108,800 vehicles, up 97.4% year-on-year; Lynk & Co brand sales in April were 22,800 vehicles; cumulative sales from January to April were 104,400 vehicles, up 4.2% year-on-year. Lynk & Co brand's high-end development is progressing smoothly, with deliveries reaching new highs in April, with an average single vehicle price reaching nearly 350,000 yuan. The average transaction price of the Lynk & Co 9X model is 530,000 yuan, with a market share of about one-third in models priced above 500,000 yuan; the Lynk & Co 8X was launched on April 17, with over 10,000 units sold in the first 29 minutes and 3,500 units delivered in 13 days, of which the Ultra and above models accounted for 95.6%. The bank believes that the order structure of the Lynk & Co 8X indicates that the company's high-end product portfolio is recognized by consumers, and the subsequent overseas expansion of Lynk & Co 9X, 8X and other models will help the company establish a high-end image and release profit elasticity. Risks: Risks include lower-than-expected brand sales and cost control not meeting expectations.