Geely Auto (Trans): Net profit near RMB 10bn; management reshuffle aims for 920k exports

Dolphin Research compiled highlights from$ GEELY AUTO.HK FY26 interim results call.

I. Key takeaways

1. Profit and scale at record highs

a. Attributable net profit was close to RMB 10 bn, implying NPM of ~5.6%. The industry avg. NPM in 1H was just ~1.6%, with many OEMs in the red.

b. Revenue grew faster than units, and profit grew faster than revenue. Volume, revenue, profit, operating efficiency and cash all reached record levels.

2. GPM and two key drivers

a. Mix: 1H GPM was 17.9% vs. 16.2% a year ago (+170bps). Q2 printed 18.4%, above Q1’s 17.5%.

b. Driver 1 — premiumization: ZEEKR sold 77k in Q1 and 100k in Q2, up ~23k QoQ. ZEEKR’s GPM is around 20%.

c. Driver 2 — globalization: Exports were slightly above 200k in Q1 and ~270k in Q2. Export GPM is ~10ppts higher than domestic sales.

3. Q3 GPM outlook and cost hedges

a. Management expects Q3 GPM to be no lower than Q2’s 18.4%, mainly on further export ramp. This leans on stronger overseas mix.

b. To offset commodity and chip price hikes, the company: pre-built commodity inventory by end-2025, locked full-year price/volume with suppliers in Q2, and hedged in futures. These actions cushion price swings into Q3–Q4.

4. Opex ratio and resource efficiency

a. G&A ratio fell from 1.9% to 1.7% (-20bps). This reflects improved scale and tighter cost control.

b. R&D ratio declined from 5.5% to 5.2%. Sales spending remains heavy onshore and steady offshore.

c. Planned model count will be cut by 20%. Overlapping nameplates across brands are removed from the product plan.

5. Accounts payable and payment terms

a. Under HKFRS, A/P was ~RMB 81 bn at end-2025 and ~RMB 84 bn as of Jun 30, 2026, up only ~RMB 3 bn. There is no YoY doubling as the market speculated.

b. A/P days: ~115 days in 1H25, ~103 days in 1H26, and ~96 days in Q2. Management expects further shortening in Q3–Q4.

c. Terms: past 45/60/90-day terms have been compressed to within 60 days. SMEs are shortened to ~30 days or settled on site.

II. Detailed call notes

2.1 Management remarks

1) Operating tone and industry backdrop in 1H

a. Units, profit, operating efficiency and cash all hit record highs. CAAM data shows Geely led China in 1H terminal sales.

b. The industry faced its toughest environment in two decades: China auto retail fell double digits in 1H, chips and raw materials rose sharply, and competition intensified.

c. Despite record revenue and margins, growth was inevitably dragged by sector headwinds. The macro and competitive setup weighed on the trajectory.

d. Management characterized results as in line, strong but not surprising, and sustainable. Sustainability rests on system capabilities, strategic resilience and long-term value creation.

e. System capability means performance was not reliant on one product, segment or time window. It came from full-stack AI, safety leadership, biz. integration, and diversified power/energy, with intelligent transformation as the highlight.

2) Leadership and governance changes

a. Eric Li stepped down as Chairman of Geely Auto, succeeded by An Conghui. An is CEO of Zhejiang Geely Holding Group, and 0175 is the only listed entity where he serves as Chairman.

b. Gui Shengyue resigned as CEO, succeeded by Gan Jiayue. Gui remains Executive Director and Vice Chairman, based in HK, focusing on HK and capital markets.

c. Li Donghui resigned current roles and now serves as Vice Chairman of Geely Holding Group, overseeing intl markets. He remains an Executive Director of 0175, continuing deep involvement.

d. Positioning: this is not a simple personnel shuffle. It signals a shift from family-led to institution-, system- and team-based governance, with greater transparency, professional decision-making and scientific management.

e. The three-layer governance structure remains in place and transparent. The company emphasizes shared responsibility and value creation, rewarding top performers.

3) One Geely strategy and resource integration

a. Building on the 2024 Taizhou Declaration, businesses with scale maturity and strategic value will be injected into the listed platform. Non-value-add businesses will be paused, and useful BU’s consolidated into 0175.

b. Optimize portfolio and resource allocation, strengthen system synergy, and reduce internal friction and duplicated spend.

c. Actions executed: integrated procurement and R&D, built shared back/middle offices, and set up a unified Geely sales company in 1H.

d. Stance: oppose price wars and mindless in-fighting. Compete on quality, technology, brand, service and corporate integrity.

4) China market and brand/product matrix

a. Premiumization path: ZEEKR, Lynk & Co, Geely Galaxy and China Star will all move upmarket, led by high-value flagships.

b. New launches in 2H: ZEEKR 009 Glory and 9X Glory; Lynk & Co Z20 and the new Lynk & Co 900. Galaxy Warship 700 (off-roader) and the all-electric TT.

c. China Star will fully pivot to i-HEV, with multiple i-HEV models coming in 2H. Xingrui L Plus and a new flagship SUV will launch to cement No.1 among Chinese ICE and hybrid brands.

d. Hero models: Xingrui ranks No.1 among Chinese self-owned A-class ICE sedans. Binyue ranks No.1 across all brands in China’s A0-class ICE and hybrid SUVs.

e. ZEEKR holds roughly one-third share in China’s >RMB 500k segment, and targets a similar share in global premium. Its brand strength builds on Volvo and Lotus safety and lightweighting, layered with Geely’s decades of tech investment.

5) Overseas markets: goals and product upgrade

a. Full-year export target raised from 640k to 920k, with a stretch to 1 mn. Long term, ~two-thirds of sales to come from overseas.

b. 1H overseas sales hit a record, up ~158% YoY, having already met the initial FY target. Near-term layout aims for one 300k market in ASEAN, three 200k markets across Pan-Europe, Eastern Europe, LatAm & Africa, and one 100k market in Middle East & APAC.

c. Product upgrade: current export SKUs are few with a narrow price band. Next step is more models across a wider band, and pushing premium products abroad.

d. Demand for Geely’s premium brands is rising in the Middle East and Europe. ZEEKR intends to prove Chinese OEMs can build premium luxury NEVs.

e. Advantages in exports: brand premiumization, broader model portfolio, and two decades of trust built via Volvo integration and partnerships with Renault, etc.

6) Overseas capacity and collaboration model

a. Core issue: overseas is the biggest growth engine for Chinese OEMs, but geopolitics are volatile. Expansion must come with lower overseas capex exposure.

b. Solution: no greenfield capacity. Share platforms and capacity with global peers, using local labor, supply chains, channels and service networks for high-quality, fast, low-risk localization.

c. Projects: Proton is on track to exceed 200k this year, targeting a 500k ASEAN hub. The Ford Spain plant targets ~500k/yr, starting 2028 for Geely-branded models.

d. The Renault Brazil plant targets ~300k/yr, and the Korea plant will keep adding. Volvo’s overseas sites will produce Geely’s premium models, with the Europe plant starting in 2028.

7) Tech stack: full-stack AI, ADAS and powertrain

a. Full-stack AI is core, spanning AI cloud power, i-HEV intelligent hybrid, 900V e-drive ecosystem, AI digital chassis, quantum-grade AI E/E architecture and chips, vehicle-sat-cloud connectivity, and embodied AI.

b. Power and efficiency: the new i-HEV unveiled in 1H delivers 12% better fuel economy vs. global benchmarks. The next-gen 16-in-1 e-drive leads on system efficiency, further cutting NEV energy use.

c. ADAS: G-ASD 5.0 enters mass production in 2H, and G-ASD H7 will roll out to more Lynk & Co and Galaxy models. Geely is the first in China with national certification for ADAS safety management, and G-ASD is the first UN-certified Chinese ADAS system.

d. Cockpit and mobility: Super EVA will enable cabin-drive integration and full-stack AI via OTA. Robotaxi at-scale operations will accelerate.

e. Long-term value: Geely was among the first to call for full-stack AI in autos, with the Xingrui AI compute center as the first step. Ecarx, G-ASD and Caocao Mobility form a coherent capability layout.

8) Battery, core components and ecosystem assets

a. Jinzhen Battery: capacity reached 70–80 GWh over the past decade, ~200 GWh next year, and ~300 GWh by 2028. Scale-up is on track.

b. Tech roadmap: solid-state, sodium-ion, large-scale energy storage and fuel cells are all expected to see breakthroughs.

c. E-drive system capacity and technology are world-class. Next step is broader enablement across the group.

d. Hangzhou Jidian: leveraging a decade of E/E component R&D to build a NEV core components base in Hangzhou. Lines are reserved for core AD tech, with domain and zonal controllers already mature.

e. These are prime candidates for injection into the listedco, consistent with adding scaled, strategic-value assets.

9) 2H focus and 2030 strategy

a. Three pillars: China market, overseas expansion and AI transition. These set the stage for the 2030 plan.

b. Use AI to address battery safety and degradation, and back-port full-stack AI to upgrade conventional powertrains. This underpins long-term competitiveness.

c. A dedicated event by year-end will detail the 2030 strategy. Management will elaborate execution roadmaps.

2.2 Q&A

Q: ZEEKR 9X has begun exports and pre-sales in Australia, the Middle East and Malaysia. How is overseas feedback? What are steady volume expectations for 8X and 9X across overseas and China?

A: Overseas mirrors China’s industry trend. In 1H, industry exports grew ~72% on avg., while Geely rose ~158%, with exports topping 420k and NEV exports up 585% YoY.

Geely leads among mainstream Chinese OEMs in export growth, NEV export growth and premium brand exports. Regional performance is balanced but divergent: LatAm up ~298% YoY, Europe nearly ~280%, ASEAN over ~120%, and Eastern Europe/Central Asia ~100%.

Near-term targets: build one 300k market, three 200k markets, and one 100k market. The mid-to-long-term 1-2-3-4-5-6 strategy means: one unified overseas system with a shared back/middle office, with ZEEKR as high-tech, Lynk & Co as sporty, and Geely as mainstream.

And 2–6 correspond to 200k in Central Asia, 300k in Eastern Europe, 400k in the Middle East, 500k in ASEAN, and 600k in Europe, totaling 2 mn. Long term, ~two-thirds of sales will come from overseas.

On premium exports, 8X and 9X have completed certifications, with positive feedback and channel mark-ups in some markets, indicating robust demand. Overseas GPM grew over 200% YoY.

Currently, ZEEKR’s export focus is 7X and 007. Next up, 8X/9X/009 will scale, with 8X accelerating from Q3 and rolling out in LatAm and Europe from Q4, and 009/009 Glory launching EU versions in 2H. No specific 8X/9X volume guide was given.

Q: China Star is growing fast. How do you view the outlook for ICE in China, and will it pivot to PHEV or i-HEV?

A: China’s ICE market totaled ~8.29 mn in 1H26, down ~24.3% YoY, with pure ICE down 31.9%. This confirms migration from ICE to NEV.

Globally, ICE volumes remain large: ~80 mn worldwide, ~20 mn in China, ~15–20 mn in the US, and ~40 mn in other regions. Global NEV penetration is only just above 10%, so ICE still has room.

China Star’s 1H sales fell ~5.7% YoY, far less than the industry. Share rose from 8.7% to ~10.4%, driven by tech route and product structure.

ICE has two directions: more HEV, and stronger intelligent driving. The latest i-HEV launched on Apr 13 is a clean-sheet platform with high-C-rate ~60C batteries and ~230 kW e-drive, achieving 48.41% thermal efficiency.

It delivers step-change gains in economy, performance, safety and reliability, with 0–100 km/h about 1s faster than Japanese peers. This stems from re-architecting fundamentals to keep engine and motor in their efficient zones.

With high-performance batteries and efficient e-drive, key metrics improve across the board, surpassing many Japanese and other models. On product, Geely will stop developing traditional ICE and shift all ICE nameplates to i-HEV.

In 2H, Xingrui L Plus, Boyue L and other i-HEVs will launch, and the full i-HEV lineup will be pushed to intl markets. The pivot is already a management mandate.

Q: Eric Li said Geely will not build new capacity, using shared capacity for intl expansion. What are the pros and cons of coordinating capacity at the Geely Holding level?

A: Overcapacity is global, not just in China. Since two-thirds of revenue will come from abroad, local manufacturing must deliver high quality, speed and low risk.

Leverage existing advantages in Europe and partner with non-Geely peers to utilize their capacity, labor, supply chains and channels. Risk control is the overriding premise.

Over the past year, priority was aligning Geely Holding and Geely Automobile Holdings to support each other and build joint competitiveness. This path differs meaningfully from peers.

Q: What drove GPM expansion in 1H? With ESS and memory chips rising, can Q3 sustain margins?

A: 1H GPM was 17.9% vs. 16.2% (+170bps). The industry avg. NPM was ~1.5% vs. Geely ~5.4%, a wide gap.

Q2 GPM was 18.4% vs. 17.5% in Q1. Two drivers: premiumization via ZEEKR (77k in Q1 and 100k in Q2 with ~20% GPM) and globalization (exports slightly above 200k in Q1 and ~270k in Q2 with ~10ppts higher GPM than domestic).

On commodities and chips: the company preempted the upcycle, built inventory by end-2025, locked full-year price/volume with suppliers in Q2, and hedged in futures. With exports set to ramp in Q3, GPM should not be below Q2.

Q: How do you view BEV trends, and what is Geely’s BEV strategy? China BEV share stabilized and resumed expansion after Apr.

A: In 1H, ICE fell ~30% and hybrids ~28%, while BEVs still grew in China. Demand remains strong, driven by four traits: high voltage, fast charging, large battery capacity and high intelligence.

New-gen platforms take time. This year, high-voltage models will roll out: ZEEKR and Lynk & Co high-voltage BEVs, and the Galaxy TT.

Galaxy TT debuted on Jul 21 with 990 firm orders, now at 22k. High-voltage tech alleviates range anxiety to a degree.

Galaxy TT launches in 2H, with more high-voltage products to follow. Lynk & Co Z20, a BEV, will launch soon, and ZEEKR 001 and 009 Glory will also hit the market as BEVs.

Q: On the Ford Spain collaboration, will Ford adopt Geely’s NEV technologies?

A: The foundation is the Geely Galaxy GEA architecture, upon which brand-specific products are developed. Risk control comes first while ensuring win-win via shared capacity and supply chains, and localized production.

Second, these Europe-made products will be sold only in Europe, not the US or elsewhere. EU competition rules require compliant local participation.

Geely will accelerate local supply chain integration to form a new structure and scale economies to lower cost. The global strategy is to share capacity worldwide and leverage the system economically.

Resources will tilt to intl, with two-thirds of sales offshore and aligned with the 1-2-3-4-5-6 strategy. Execution hinges on deeper localization: intl products, local supply chains, and continued brand and tech upgrade, with after-sales as a critical differentiator.

Q: Why did A/P double YoY per the report? Any full-year A/P outlook?

A: That needs correction. Under HKFRS, A/P was ~RMB 81 bn at end-2025 and ~RMB 84 bn on Jun 30, 2026, up only ~RMB 3 bn, not a doubling.

Following Gov. policies discouraging destructive competition, Geely accelerated payments. Terms >60 days were compressed to within 60 days, and SMEs to ~30 days or on-site payment.

A/P days improved from ~115 in 1H25 to ~103 in 1H26, and to ~96 in Q2. As more policies land, Q3–Q4 should shorten further. No full-year guidance was provided.

Q: Progress on grid distribution, charging infra and energy replenishment, as well as energy storage and savings?

A: BEV scale relies heavily on ultra-fast charging. User experience depends on convenience, immediacy and discharge efficiency, which hinge on network density.

Two real issues persist: high temperatures damage batteries, with degradation roughly doubling for every +10°C beyond ~45–50°C, potentially halving a ~10-year life to ~5 years. And ultra-fast charging entails latent risks.

Geely spent 4–5 years building end-to-end fast-charging via AI. In 2021, Haohan Energy launched 360 kW ultra-fast chargers, cutting charge time from hours to minutes, then from ~30 mins to ~11.5 mins.

In Apr 2025, it launched mass-produced megawatt-class gear rated at 1,500 kW (actual ~1,230 kW), charging 10%–70% in ~4m22s and full in just over 8 mins. Subsequent work added thermal control, AI and smart charging.

The 5th-gen charger, built on AI foundation models and ultra-megawatt tech, will debut before end-Q3 this year. Key: smart thermal control to keep the chain below 65°C per national certification, and AI thermal control with car-pile-cloud multi-point, millisecond detection.

Detection, maintenance and charging are integrated, giving users more control over time and safety. More details will come at the late-Q3 tech event.

Q: One Geely has clearly reshaped the back office. Will the front end change more? With overlapping 9X/Lynk/ZEEKR/Galaxy models, how will sub-brand positioning be clarified, and will product lines be streamlined?

A: By the numbers: in 1H, Galaxy volumes fell 5%, Lynk & Co 6% and China Star 5%, while ZEEKR grew 97%. Overall revenue grew 1% vs. industry avg. of -6%.

Since the 2024 Taizhou Declaration, One Geely has driven integration: shared back/middle offices, trimmed duplication, leaner org and functions, and integrated procurement and R&D. A unified sales company was set up in 1H.

Results show in P&L: G&A ratio fell from 1.9% to 1.7%, sales spending remains heavy in China and stable offshore, and R&D ratio fell from 5.5% to 5.2%.

In product planning, any overlaps across ZEEKR/Lynk & Co/Galaxy/China Star are removed on sight. Model count is down 20%.

Brand roles are clear: Galaxy targets premium-mainstream, Lynk & Co focuses on trendy/sporty with a broader lineup, and ZEEKR is a premium tech brand. 2H is a key window with dense launches.

Galaxy TT and Warship 700 bring new tech and have high recognition, with heat likely to stay elevated in 2H. Lynk & Co Z20 is poised to be a blockbuster.

Additional view: Geely lacks clear blockbusters today. Legacy product plans are being reviewed, which takes time.

While 1H GPM, ASP and per-vehicle profit were solid, management is proactively addressing gaps: results rely heavily on ZEEKR, then Galaxy, while mid-price brand strength is still lacking. Strong mid-range blockbusters would lift GPM and unit profits materially.

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