Global EV Adoption And Smart Mobility Will Transform Markets

Key Takeaways

• Geely's strong NEV growth, advanced AI ecosystem, and global supply chain enable accelerated revenue, margin expansion, and resilience against market volatility.
  
• Strategic multi-brand positioning and vertical integration secure cost leadership, broad market capture, and multi-year pricing power globally.
  
• Heavy reliance on traditional vehicles, operational complexity, geopolitical risks, and lagging digital innovation threaten margins, profitability, and international growth amid intensifying EV market competition.

Catalysts

An investment holding company, operates as an automobile manufacturer primarily in the People’s Republic of China.

• Analyst consensus points to strong uplift from 10 new NEV launches and global expansion in 2025, but recent explosive 92% NEV volume growth and ambitious target of 1.5 million NEV sales suggest market share gains and revenue growth could accelerate far beyond expectations, especially as Geely's NEVs have now entered a sustained profitability phase with 60%+ segment market share penetration.
  
• While analyst consensus sees the integration of smart driving features as margin-accretive, it understates the long-term impact of Geely's proprietary, vertically integrated AI ecosystem and computing infrastructure, which positions Geely to leapfrog competitors not just in average selling price, but through high-margin recurring software and data services that can deliver multi-year margin expansion and new revenue streams.
  
• Geely's established global supply chain localization and factory footprints in over 80 countries enable faster-than-expected ramp in key growth markets such as Southeast Asia, Africa, and Latin America, laying the groundwork for rapid export-driven revenue diversification and resilience against weakness in the Chinese market.
  
• Strategic control of a broad multi-brand portfolio-including high-end Zeekr, young-urban Lynk & Co, and mass-market Geely-uniquely positions the group to capture the full spectrum of surging vehicle demand from a rapidly urbanizing global middle class, supporting sustained volume growth and pricing power.
  
• Geely's early and deep investments in vertical integration, proprietary EV platforms, and battery tech provide cost leadership and production resilience, securing higher gross margins and safeguarding earnings against industry supply shocks as global EV penetration accelerates.

Geely Automobile Holdings Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Geely Automobile Holdings compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Geely Automobile Holdings's revenue will grow by 35.0% annually over the next 3 years.
• The bullish analysts assume that profit margins will shrink from 8.1% today to 5.2% in 3 years time.
• The bullish analysts expect earnings to reach CN¥32.4 billion (and earnings per share of CN¥3.18) by about August 2028, up from CN¥20.6 billion today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 13.0x on those 2028 earnings, up from 8.2x today. This future PE is lower than the current PE for the HK Auto industry at 21.0x.
• Analysts expect the number of shares outstanding to grow by 0.12% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 12.23%, as per the Simply Wall St company report.

Geely Automobile Holdings Future Earnings Per Share Growth

Risks

• Geely's exposure to ICE (internal combustion engine) vehicles as a major focus of its long-term strategy may result in significant margin pressure and costly compliance investments, as global decarbonization policies and stricter emissions regulations intensify, particularly in export markets, ultimately eroding international competitiveness and profitability.
  
• The company's ambitious overseas expansion plans are vulnerable to escalating geopolitical tensions, rising protectionism, and regulatory barriers such as anti-subsidy investigations into Chinese EVs, which could limit the diversification of revenue streams and restrict growth in international sales over time.
  
• Geely's large, complex brand and model portfolio-including the recently merged Lynk & Co and Zeekr-adds operational complexity, risks diluting management focus, and drives higher overhead, raising the potential for inefficiencies that could weigh on operating margins and pose challenges to sustained net earnings growth.
  
• Despite substantial R&D investments in software, AI, and autonomous driving, there is a risk that Geely lags behind global technology leaders in establishing digital ecosystems, which could lead to technology obsolescence, reduced vehicle appeal in advanced markets, and eventual loss of market share, impacting future revenue and gross margin potential.
  
• The rapidly intensifying competition in China's EV market, including persistent price wars and the shift toward lower-margin budget models, is likely to compress Geely's gross margins and net earnings, while ongoing supply-chain risks and cost volatility, particularly for critical EV materials, may further threaten profitability and free cash flow.

Valuation

• The assumed bullish price target for Geely Automobile Holdings is HK$32.25, which represents two standard deviations above the consensus price target of HK$25.41. This valuation is based on what can be assumed as the expectations of Geely Automobile Holdings's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of HK$34.97, and the most bearish reporting a price target of just HK$21.03.
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be CN¥625.7 billion, earnings will come to CN¥32.4 billion, and it would be trading on a PE ratio of 13.0x, assuming you use a discount rate of 12.2%.
• Given the current share price of HK$18.41, the bullish analyst price target of HK$32.25 is 42.9% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.