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"Judging from the performance in the first half of this year, we have seen the dawn of Geely Auto's return to glory."

On August 21, at Geely’s mid-year financial report conference, Geely Automobile Holdings Limited Executive Director and CEO Gui Shengyue expressed quite confidently.

His confidence comes from Geely’s performance in the first half of the year.

In the first half of 2024, Geely achieved operating revenue of 107.3 billion yuan, a year-on-year increase of 46.6%. For the first time, its operating revenue exceeded 100 billion yuan, setting a historical high.

The improvement in operating profitability also led to a significant year-on-year increase in profit attributable to shareholders. In the first half of the year, the profit attributable to shareholders was 10.6 billion yuan, a year-on-year increase of 574.7%; the profit attributable to non-shareholders was 3.37 billion yuan, a year-on-year increase of 114%; and the net cash level increased by 25.4% year-on-year to 35.7 billion yuan.

Thanks to the significant scale effect and product structure optimization during the performance period, Geely's total gross profit increased significantly to 16.2 billion yuan, with a gross profit margin of 15.1%. At the same time, Geely's overall average sales revenue per vehicle was 105,400 yuan, a year-on-year increase of 4.2%.

What is particularly noteworthy is that Geely's other business revenues, including its three-electric business, technology licensing and R&D service revenues, grew to 19.825 billion yuan, which means that Geely made a net profit of nearly 20 billion yuan in half a year by relying on technology output.

Kungfu Auto believes that behind the 20 billion technology dividend is the fact that the two Blue Geely Action Plans in 2021 and the "Smart Geely 025" strategy have entered a flourishing harvest period, thus leading Geely Auto into a dividend period of technological output.

This is very rare for an automobile company, and it is even unique among Chinese automobile companies.

Behind the revenue exceeding 100 billion for the first time and the profit increasing nearly 6 times, the driving core of Geely's glorious resurgence has quietly undergone fission, and a technology-driven smart electric car giant has quietly arrived.

To borrow an analogy from the popular movie "Black Myth: Wukong", Geely is like the "Wukong" in the automotive industry, having created a "transformation myth" in more than three years.

(1) Geely is back, but the intelligence behind it has changed

Looking at Geely’s interim report, we find that the rapid development of the new energy sector is the key to Geely’s revenue hitting a record high, and it is also the basis for it to dare to raise its full-year target again.

In the first half of this year, Geely achieved cumulative sales of 956,000 vehicles, a year-on-year increase of 41%, setting a new record. Among them, the cumulative sales of new energy vehicles in the first half of the year reached 320,000 vehicles, a year-on-year increase of 117%, and the penetration rate also increased from 21.8% in the same period last year to 33.5%, firmly ranking first among independent new energy brands.

At the brand level, Geely Galaxy series has a cumulative sales volume of 81,000 units in the first half of 2024, a year-on-year increase of 742%. The newly launched Galaxy E5 is equipped with core technologies such as Aegis Dagger battery, GEA global intelligent new energy architecture, and Galaxy 11-in-1 intelligent electric drive, demonstrating Geely's ability in technological innovation and market control.

Lynk & Co achieved significant growth in the first half of 2024, with total sales of 126,000 units, a year-on-year increase of 53.6%. Among them, the sales of new energy vehicles accounted for 50.9%, setting a new record. Zeekr's cumulative deliveries in the first half of 2024 reached 87,800 units, a year-on-year increase of 106%.

Judging from the performance of the three major brands, with the arrival of the critical point of new energy explosion, the familiar and sharp Geely is back.

Kungfu Auto believes that the strong rise of Geely's new energy vehicles comes from the empowerment of technological innovation. It can even be said that technological innovation has become the "new quality productivity" that drives Geely's sales growth.

In fact, in the first half of the year alone, Geely's total investment in research and development reached 7 billion yuan, an increase of 17.9% year-on-year, comprehensively accelerating the development of technology in areas such as the "Smart Geely Ecological Network".

At present, Geely has made layouts in the fields of three-electric technology, self-developed chip operating system, satellite interconnection, and intelligent computing center.

In the highly-watched AI field, Geely has released the Geely Xingrui AI big model, and is the first in the automotive industry to obtain the trusted AI big model standard compliance verification organized by the Artificial Intelligence Research Center of the China Academy of Information and Communications Technology, and received a 4+ rating.

It is worth noting that the Geely Star AI big model was developed based on the Geely Star Intelligent Computing Center, and the total cloud computing power has been expanded to 10.2 quadrillion times per second, continuing to maintain the top computing power among Chinese auto companies.

But if we talk about what best reflects Geely's foresight in technological innovation, we have to mention the strategic layout of its integrated space-ground smart travel ecosystem.

At present, Geely has successfully launched 11 satellites in the second orbit. In 2025, the first phase of the constellation will complete the deployment of 72 satellites to achieve global real-time data communication. The second phase will be expanded to 168 satellites to achieve global centimeter-level high-precision positioning services. Geely is also the only automobile company in the world, besides Tesla, that can build both cars and satellites.

Not only that, Geely's innovative technological applications have also been gradually installed in vehicles, including Zeekr's fully self-developed Haohan Intelligent Driving, Lynk & Co's high-precision maps, elevated NOA, Geely Galaxy's Flyme Auto, and so on.

In the field of intelligent architecture, as a "family of architecture", Geely is also in the leading position in the industry. In addition, in the intelligent energy system, Geely supports hybrid, pure electric, extended range and green methanol energy forms, and Geely has also developed the industry-leading Aegis Dagger battery.

The application of these technological innovations constitutes Geely's solid technological moat in the new energy era and greatly improves Geely's "position" in the intelligent electric era. Li Donghui, CEO of Zhejiang Geely Holding Group, said: "Geely's forward-looking technology and technological ecosystem layout are all empowering the main automotive business and Geely's intelligent electric transformation."

Kung Fu Auto believes that it is precisely because of technological innovation that Geely has gained the opportunity to counterattack in an environment of internal competition.Over the past three years, as Geely's Smart 2025 strategy continued to deepen, Geely's "intelligence" and new energy sales and even total sales have shown a highly consistent year-on-year growth.

Judging from the interim report, Geely is now not only a vehicle manufacturer, but also a technology innovation company.

(2) The 20 billion “bonus” income is unique in the industry

The forward-looking technology and technology ecosystem layout that Geely has made in recent years has not only empowered its main automotive business, but also enabled Geely to gain more technological profits through technological innovations such as technology licensing. Geely has entered a period of reaping the benefits of technology dividends.

This also led to Geely's revenue of 19.825 billion yuan from other businesses such as the three-electric business, technology licensing and R&D service revenue. At the same time, the scale effect also helped Geely share the investment costs of technology research and development.

It is worth noting that in addition to new energy-related fields such as three-electric, architecture, and batteries, Geely also achieves technology output in traditional powertrains.

At present, the HORSE joint venture established by Geely and Renault has become an important player in the global powertrain field. Li Donghui said that HORSE has an annual production capacity of 5 million powertrains, serving 9 major customers around the world and consumers in 130 countries.

In addition, HORSE also introduced Saudi Aramco as a strategic investor, further enhancing its competitiveness in the global market.

Globally, the automobile companies that purchase and use Geely technology include not only luxury brands such as Volvo, but also mainstream multinational automakers such as Renault, Proton, Nissan, and Mitsubishi. In this regard, Li Donghui believes that "Geely is committed to becoming a global leader in power systems."

Looking at the current technology output income of car companies, there are very few except Geely, Xiaopeng and a few others. Geely is definitely the big winner of the technology dividend, and this profit model is sustainable. This also reflects the value of Geely in the field of science and technology.

(3) This easily overlooked “first” is actually a commitment to “values”

While making great strides in the field of new energy, Geely has also quietly returned to the top in the field of traditional fuel.This is a piece of information that is easily overlooked, but it is a "first" worth mentioning.

Geely China Star high-end series sales in the first half of the year reached 205,000 units, a year-on-year increase of 56%. This has enabled Geely to generate synergy in the traditional fuel sector as the new energy transition approaches the "critical point", stabilizing the basic market.

The success of the China Star high-end series has once again confirmed the correctness of Geely’s “value war” approach.

As a high-end model series of the Geely brand, the China Star series has always been Geely's core competitiveness in the field of fuel vehicles. In the Chinese auto market where price wars are escalating, the China Star series has also become an excellent embodiment of Geely's adherence to market pricing rules and protection of customers' long-term interests.

Gan Jiayue, CEO of Geely Auto Group, insisted: "Geely will always adhere to the market pricing rules, insist on the leading position of product technology, fight the quality war, technology war, service war and moral character war to ensure that the long-term interests of customers are not damaged."

As Geely has always insisted on "both" - making its products competitive and controlling product costs, Geely has optimized its product structure, significantly increasing its total gross profit to 16.2 billion yuan, with a gross profit margin of 15.1%.

(4) Kung Fu Clap

Looking at this interim report with extremely high technological content, we see Geely's strategic determination and courage to continue to increase its investment in intelligence behind its regaining glory.

In 2021, the two Blue Geely Action Plans and the "Smart Geely 025" strategy were implemented. At that time, everyone saw that Geely, the elephant, was dancing with chains on. It was not a small feat to "recreate a Geely" in the trough.

But only three years later, Geely's new energy penetration rate has ranked first and reached a critical point; the technology dividend income has reached nearly 20 billion in half a year. This was an unimaginable achievement at the time.

Three years passed in the blink of an eye, and the "Wukong" of the automotive industry has created a brand new Geely, a Geely that looks more technological.