--- title: "Geely Closing In: Is BYD's Crown Secure?---" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/39336780.md" description: "SG&A and R&D spend rose sharply. This severely eroded OP for the period." datetime: "2026-03-18T11:42:44.000Z" locales: - [en](https://longbridge.com/en/topics/39336780.md) - [zh-CN](https://longbridge.com/zh-CN/topics/39336780.md) - [zh-HK](https://longbridge.com/zh-HK/topics/39336780.md) author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)" --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/topics/39336780.md) | [繁體中文](https://longbridge.com/zh-HK/topics/39336780.md) # Geely Closing In: Is BYD's Crown Secure?--- $GEELY AUTO(00175.HK) released its Q4 2025 report at Hong Kong midday on Mar 18, 2026 (HKT). Here are the key takeaways. **1\. Revenue slightly beat:** Q4 revenue reached RMB 105.7bn (+22% YoY), marginally above the Street's RMB 104.3bn. The beat was driven by a richer mix and higher ASP as the premiumization strategy gained traction. **2\. ASP per vehicle kept rising QoQ on premium mix:** Q4 ASP was RMB 124k, up RMB 7k QoQ, mainly on ZEEKR's premium surge. The mix shift continued to favor higher-end models. ZEEKR sales jumped 52% QoQ to 53k units in Q4, lifting its share of total volume by 2.5ppt to 9.4%. The brand's mix upgrade materially supported ASP. Growth was led by the higher-priced ZEEKR 9X (RMB 465.9k–599.9k) and the refreshed ZEEKR 001. ZEEKR 9X sold 21.4k units in Q4 with an Avg. ticket of RMB 538k, providing a major uplift to overall ASP. **3\. GPM improved QoQ:** Consolidated GPM reached 16.9% in Q4, up 90bps QoQ. The recovery was driven by the following. a. Premium volume and margin repair: Strong sell-through of high-margin models such as ZEEKR 9X (Est. GPM \>40%) and fewer promotions on Lynk & Co ICE models aided margin recovery. The ramp of Galaxy M9 and other premium launches also supported ZEEKR Group's GPM. b. Scale benefits: Total Q4 shipments rose 12.3% QoQ to 854k units, diluting fixed D&A per unit. Operating leverage kicked in with higher volumes. **4\. Heavier opex squeezed core OP:** Despite better revenue and GP, core OPM declined QoQ on sharply higher opex. The increase across R&D, S&M and G&A materially undershot expectations for core earnings. R&D rose by RMB 1.5bn QoQ to RMB 5.9bn, funding next-gen premium models (e.g., ZEEKR 8X and subsequent flagships) and smart features (city NOA, smart cockpit, chips). A higher capitalization ratio and one-off items from autonomous driving team integration also weighed. Selling expenses likewise rose by RMB 1.3bn QoQ to RMB 6.7bn, driven by premium-brand marketing (ZEEKR 9X promotion) and rapid channel expansion onshore and offshore, laying groundwork for 2026 export targets of 0.64–0.70mn units. **Core OP fell 16% QoQ to RMB 2.84bn, well below the Street's RMB 3.88bn.** Core OPM declined 90bps QoQ to 2.7%, while per-vehicle core profit dropped RMB 1,100 to RMB 3.3k. Profitability was pressured by elevated opex intensity. **5\. Attrib. net profit held near estimates thanks to JV income:** With OP squeezed, Q4 attrib. net profit was RMB 3.74bn (+4% YoY), and per-vehicle net profit slipped from RMB 5.0k to RMB 4.4k QoQ. The in-line net result was largely supported by a QoQ increase of RMB 520mn in JV income to about RMB 780mn. **Overall, Q4 shows premiumization drove a beat on revenue and GPM, while sharply higher opex severely eroded core OP.** The trade-off between growth investments and near-term profitability remained pronounced. On volume, execution stayed on track. Management had raised the 2025 sales target from 2.71mn to 3.00mn, and actual full-year sales reached 3.02mn units, exceeding the goal. **NEV transition accelerated further:** In Q4, NEV sales hit 520k units (+17.4% QoQ), lifting the NEV penetration rate from 58% in Q3 to 61%. This marks a shift into a phase where NEVs dominate the portfolio. **By brand:** a. Galaxy series: NEV sales rose 29% QoQ to 190k units, led by new models such as Galaxy M9, Xingyao 6, Galaxy A7 and Xingjian 7. This continues to validate Galaxy's strategy of competing head-to-head with BYD. b. Lynk & Co: NEV sales grew 24% QoQ to 79k units, with NEVs now 72% of brand sales. Growth was driven by strong demand for Lynk 10, Lynk 08 and Lynk 07. c. ZEEKR: Led the pack with 52% QoQ growth to 53k units, propelled by ZEEKR 9X and ZEEKR 001. The brand's premium mix, especially the breakout of 9X, further lifted per-vehicle ASP and auto GPM. For full-year 2025, NEV sales reached 1.688mn units (+90% YoY), well above the raised 1.5mn target (113% achievement). The company materially outperformed on its NEV pivot. **2026 outlook:** **① Product cycle to stay strong; overseas to drive incremental growth** **The company set a 2026 total sales target of 3.45mn units (+14% YoY), with growth led by NEVs and overseas expansion.** The mix will tilt further toward electrified models and external markets. NEV sales target is 2.22mn (+32% YoY), taking NEV penetration up another 8.5ppt YoY to 64%. ICE volume is guided at 1.23mn (-8% YoY), reflecting the ongoing shift. **Across brands, nearly 10 new models are slated for 2026 to support the volume plan:** Launch cadence will underpin both mix upgrade and share gains. **Geely Galaxy:** As the core volume pillar, NEV sales target is 1.52mn (+23% YoY), anchored by multiple launches including M7 and Xingyao 7. These models aim to consolidate the mainstream segment. **ZEEKR:** Targeting 300k units (+34% YoY), with incremental volume from the pre-sold ZEEKR 8X and continued ramp of 9X. This is the core driver of premiumization and profit uplift. ZEEKR 8X will launch in Apr, positioned with leading dynamics, luxury and comfort. With proactive brand strategy, upward brand momentum and a firmer foothold in the high end, ZEEKR is set to strengthen its premium profile. As integration benefits materialize, the premium mix should deliver sizable profit elasticity. **Lynk & Co:** Targeting 400k units (+14% YoY), with NEV transition (current penetration \>72%) and new models such as Lynk 800 jointly driving growth. The brand continues to pivot rapidly to electrified offerings. **② Overseas surge to add high-margin optionality:** Overseas sales are guided to grow 53% YoY in 2026 to about 640k units, with 121k exports already achieved in Jan–Feb (+129% YoY). On an annualized basis, this implies 730k, suggesting high visibility on the overseas target. Growth abroad will be driven by NEV exports and network expansion: NEVs are expected to reach 45%–50% of overseas mix (approx. 290k–320k units), while the overseas channel network is planned to exceed 2,200 outlets. Distribution buildout remains a key enabler. Overseas is key to margin expansion: in 2025, export ASP (RMB 176.5k) was 1.7x domestic, with GPM higher by ~10ppt and per-vehicle net profit near RMB 10k. With overseas share rising to 18.6% in 2026, the high-profit profile should lift consolidated earnings. **③ Synergies from 'One Geely' to unlock cost efficiency:** Following ZEEKR's privatization at end-2025, the 'One Geely' strategy entered full execution in 2026. This is expected to deliver tangible synergies. Integration across R&D, procurement, manufacturing and management should lower operating costs. As synergies fully kick in during 2026, R&D, S&M and G&A ratios should stabilize or decline, easing the profit squeeze seen in Q4 2025 from intensive spending. Based on the 3.45mn 2026 sales target and a further 10% YoY increase in per-vehicle net profit to RMB 6k, Dolphin Research estimates 2026 net profit at RMB 21.0bn (+25% YoY). At the current share price, this implies 8–9x P/E for Geely, still undemanding given concerns over lower industry beta post purchase-tax rollback. Given a faster NEV transition and profit release from premiumization and exports in 2026, Dolphin Research assigns a 10–12x 2026E P/E, implying fair market cap of RMB 210–252bn. This suggests 22%–46% upside vs. the current level. ### Related Stocks - [GEELY AUTO (00175.HK)](https://longbridge.com/en/quote/00175.HK.md) - [GEELY AUTO-R (80175.HK)](https://longbridge.com/en/quote/80175.HK.md) - [Geely Automobile Holdings Limited (GELYY.US)](https://longbridge.com/en/quote/GELYY.US.md) - [ZEEKR Intelligent Technology Holding Limited (ZK.US)](https://longbridge.com/en/quote/ZK.US.md) - [BYD COMPANY (01211.HK)](https://longbridge.com/en/quote/01211.HK.md) - [BYD Company Limited (BYDDY.US)](https://longbridge.com/en/quote/BYDDY.US.md) - [BYD (002594.CN)](https://longbridge.com/en/quote/002594.CN.md) - [BYD COMPANY-R (81211.HK)](https://longbridge.com/en/quote/81211.HK.md) - [BYD Company Limited (BYDDF.US)](https://longbridge.com/en/quote/BYDDF.US.md) - [GEELY AUTOMOBILE HOLDINGS LIMITED SPON ADS EACH REP 20 ORD (GELHY.US)](https://longbridge.com/en/quote/GELHY.US.md) - [BYD Company Limited (HYDD.SG)](https://longbridge.com/en/quote/HYDD.SG.md)