Geely Automobile’s sales of new energy vehicles increased by 300% in 2022, and it is estimated that the sales volume will exceed 650,000 this year.
On March 21st, the 2022 financial report released by Geely Automobile Holdings Co., Ltd. (00175.HK, Geely Automobile) showed that Geely Automobile achieved a revenue of 147.965 billion yuan in 2022, a year-on-year increase of 45.6%, a record high; The net profit of returning to the mother was 5.26 billion yuan, an increase of 8.5% year-on-year; The total cash level rose by 20.4% to 33.7 billion yuan, a record high.
In 2022, the total sales volume of Geely Automobile was 1.433 million, up 8% year-on-year. Among them, the sales volume of new energy vehicles increased by 300% to 328,700 units, and the proportion of sales further increased from 6.2% in the same period of last year to 22.9%; The proportion of export sales increased to 13.8%, an increase of 5.1 percentage points.
From the perspective of gross profit margin, Geely Automobile’s overall gross profit margin fell by 3 percentage points to 14.1% due to factors such as the price increase of raw materials, the increase in the proportion of new energy products and the fact that the gross profit margin level was lower than that of fuel vehicles.
Dai Qing, senior vice president and CFO of Geely Automobile Group, stressed at the performance meeting that in the short term, the improvement of its market share in the new energy market is the primary task of Geely Automobile.
Geely Automobile Financial Summary, from Financial Report
Sales of new energy vehicles increased by 300%, accounting for more than 20%.
In the transformation of new energy vehicles, Geely Automobile has long been criticized by the industry and the market. Gui Shengyue, CEO and executive director of Geely Automobile Holdings Co., Ltd. believes that the speed and layout of Geely Automobile passenger car plate in the transformation of new energy are not satisfactory, which also affects Geely Automobile’s performance in the stock market. In 2022, Geely Automobile has made a turning point in its energy business in the New Year.
In 2022, the sales volume of Geely Automobile’s new energy products (including Geely, Geometry, Lectra, Krypton and Ruilan) was 328,700, a year-on-year increase of 300%. Dai Qing said at the performance meeting that Geely Automobile is the fastest growing car company of new energy vehicles in 2022.
2022 is also the year of new energy transformation of Lectra, and its sales volume of new energy vehicles increased from 5.5% to 21.7%. However, due to the overall strategic transformation, the overall sales volume of Lectra was 180,100 vehicles, down 18% year-on-year.
In terms of brand planning, Gui Shengyue introduced that Geely’s current strategy of comprehensive transformation to new energy is very clear, and each brand has its own clear positioning and division of labor. Among them, Krypton, which was established less than two years ago, as the vanguard of Geely’s new energy layout, focuses on the luxury electric vehicle market and will lead the group to accelerate its transformation; Lectra focuses on high-end electric vehicles and new energy markets, while Geely brand mainly covers popular electric vehicles and new energy markets.
At the same time, Geely Automobile said that with 2020 as the base year, its bicycle life cycle carbon emissions decreased by 8% in 2022. Geely Automobile promises to reduce carbon emissions of bicycles by more than 25% in the whole life cycle by 2025, and achieve carbon neutrality by 2045.
In addition, in terms of high-end models, Geely said that in 2022, Geely’s bicycle sales revenue was 103,000 yuan, a year-on-year increase of 29.6%; The average gross profit of bicycles was 17,500 yuan, up 11.1% year-on-year. Among them, the high-value product "China Star" series achieved an overall sales volume of 252,800 vehicles, accounting for nearly 23% of Geely (including geometry) brands, with a maximum monthly sales volume of 30,000 vehicles and an average bicycle price of 150,000 yuan; The weighted average selling price of Link brand products is 174,000 yuan; The average order amount of Krypton 001 exceeds 336,000 yuan.
Extreme krypton car will choose the opportunity to publicly hand over the watch.
Geely Automobile Financial Report further disclosed the split listing of Krypton.
On October 31, 2022, Geely Automobile submitted a proposal to the Hong Kong Stock Exchange on the proposed spin-off of Extreme Krypton Holdings and its independent listing. The Hong Kong Stock Exchange has confirmed that the proposed spin-off can be carried out.
According to the financial report, on December 7, 2022, Extreme Krypton Holdings submitted a draft registration statement to the US Securities and Exchange Commission for possible initial public offering with American exchanges on a confidential basis. As of the date of earnings report or authorization, the US Securities and Exchange Commission is still reviewing the draft. An Conghui, Chairman of Geely Automobile Group, Executive Director of Geely Automobile Holdings Co., Ltd. and CEO of Extreme Smart Technology, said at the performance meeting that if the market window is right, he will make a public submission and strive to complete the listing.
According to Geely Automobile’s previous announcement, in February this year, Extreme Krypton announced the completion of Series A financing of 750 million US dollars, with a post-investment valuation of 13 billion US dollars.
Dai Qing introduced that Krypton recorded a loss of 2.03 billion yuan in 2022, and calculated by Geely Automobile (00175.HK), a loss of 1.36 billion yuan was included in the net profit.
The main financial data of Extreme Krypton Holdings comes from the financial report.
An Conghui responded to the recent price war in the auto market, saying that Extreme Krypton did not reduce the price or protect the price, but increased the rights and interests of users and did not adjust the price. After the increase of rights and interests, orders have changed dramatically and improved rapidly, which has also attracted some users who hold money and wait and see.
In view of the future development of extreme krypton cars, An Conghui mentioned that Tesla made money, which proves that the track of electric cars can make money. The Krypton 009 uses integrated die casting, and its tonnage and product volume are larger than Tesla’s. In the future, integrated die casting will be fully applied to other models, which will further reduce the cost of Krypton. He said that he is confident to complete the delivery of 140,000 vehicles in 2023, of which the sales volume of Extreme Krypton 001 is about 70,000, the sales volume of Extreme Krypton 009 can reach more than 30,000, and the sales volume of Extreme Krypton X is more than 40,000. At the end of this year, Krypton will also launch a car model, and two new models will be launched in 2024. It is estimated that in 2025, Krypton will deliver 650,000 vehicles, and there will be 8 models to support the annual sales of 650,000 vehicles.
The annual export increased by 70%, and the authorized income was 1.657 billion yuan.
2022 is undoubtedly a big year for China’s independent brands to export, and Geely Automobile has also made a relatively obvious growth in export.
The financial report shows that in 2022, Geely Automobile exported 198,200 vehicles, up 72.4% year-on-year. Among them, the mid-to high-end brand Lingke shipped 35,600 vehicles in 2022, of which new energy vehicles accounted for 97%. As of March 2023, Link has opened 11 Link experience stores in the Netherlands, Sweden, Belgium, Germany, Italy and Spain. Geely said that the territory of "European Strategy" has been further expanded, realizing the normalization of vehicle export to Europe. In terms of "Asia-Pacific Strategy", Lectra has successively opened up markets in Israel and Saudi Arabia; In the future, Link will continue to explore the Middle East Gulf countries and land in new markets in Southeast Asia.
It is noteworthy that from product export to technology export, Geely Automobile’s authorized income has further increased, and in 2022, it achieved a total income of 1.657 billion, a year-on-year increase of 29.9%. Geely said that the growth of authorized income will support its future profit.
In 2022, the authorized income of Geely Automobile was 1.657 billion yuan, which came from the financial report.
In 2022, the shareholding in South Korea’s Renault is also an important step in the internationalization of Geely Automobile.
Previous announcements showed that on May 9, 2022, Geely Automobile signed a subscription agreement with Renault Korea to subscribe for 34.02% shares of Renault Korea at a price of nearly 1.4 billion yuan. The financial report shows that in November 2022, Geely Automobile completed its shareholding in Renault Korea Automobile, and will introduce new hybrid technologies and models to the Korean market. Its new products will adopt CMA modular architecture developed by Geely’s R&D center in Sweden, and use Geely’s hybrid technology. It is expected to be mass-produced in 2024.
For Geely Automobile, how to increase its share in the new energy market is still the primary task. Gui Shengyue said that everyone is used to treating car companies with "new forces" and "old forces", while Tesla and BYD have worked hard in the field of new energy vehicles for many years and achieved huge profits last year, which reflects the most fundamental development law of the automobile industry, that is, scale can generate profits. If there is a lack of scale, the prospects will be worrying. He believes that enterprises like Geely will gradually show great advantages in scale. For example, Volvo, Polar Star, Lotus, smart and Jidu Automobile will eventually achieve real scale benefits on the basis of sharing platforms, but this advantage has not yet been reflected, which is also Geely’s "confidence to catch up".
Looking forward to the future, Geely Automobile said that the annual sales target in 2023 is 1.65 million vehicles, of which the sales of new energy will double compared with 2022. In terms of new models, Geely introduced at the performance meeting that in the next four quarters, 10 new models will be put on the market one after another.