First of all, I have this opinion on Reddit also already posted and partly written on the cell phone therefore it has already a few spelling errors in it... Since here are but some users who are not there I thought possibly interested someone here. ;) In addition, I could not insert here the images/PP slides between the texts what I find a pity...
Since I think that hardly anyone reads the whole "analysis", I ask it here already - How are you set to Geely?
Geely
- WKN: A0CACX
- Founded: 06.11.1986
- Market capitalization: 29,234.62 million EUR
- History: Was founded as a manufacturer of parts for refrigerators. Then from 1992 they built motorcycles and since 1998 cars.
- Company website: https://www.geely.com/
http://global.geely.com/ Respectively from the joint stock company: http://www.geelyauto.com.hk/en/
Geely
Geely - you might think of such "hip" companies like Polestar, Lotus, flying cars (Terrafugia), the new Smarts (the next generation will be manufactured by Geely) or the electronic version of the London cabs. (https://praxistipps.focus.de/tochterunternehmen-von-geely-die-wichtigsten-marken-im-ueberblick_103169 , http://zgh.com/our-brands/geely-auto/?lang=en ) When I bought my first Geely stock I thought I was buying all this stuff. A valuation of around 29 billion would have been a great value play, wouldn't it?
However, well fuck, Chinese companies are hard to understand... Because all these "hip" companies only belong to the Zhejiang Geely Holding Group. And this is only the parent company of Geely Automobile Holdings Limited. And only from Geely Automobile Holdings Limited you can buy shares. (So clearly also Volvo etc. but never mind...) For illustration I have shown you a small subdivision into the different groups of the Zhenjiang Geely Holding Group. This is attached below with the pictures. But in short, Jan Marsalek would build a company similar.
So you can see that there are only four companies in the Geely Auto Group. But unfortunately this is also misleading. Because if you buy shares of Geely Automobile Holdings Limited, you do not buy these 4 companies. Why there is this subdivision then I can't say. (At least based on the Investor Presis and the Annual Report 2020).
Instead you buy the following brands for these target markets:
Geely: mass market
Geely: EV market/BEV market
Lynk&Co: BEV high-end market (50:50 joint venture with Volvo Cars).
Zeekr: High-end/Smart EV market (50:50 joint venture with parent company).
Nevertheless, I hope that this large group structure will also create certain synergy benefits for Geely Auto. An example of these benefits would be the joint venture "LYNK & CD" of Geely Auto and Volvo Cars. Or that engines, autonomous systems and future architectures for electric/hybrid cars will be developed together with the Volvo Car Group. (S. 48, http://www.geelyauto.com.hk/core/files/financial/en/2021-01.pdf )
Before I explain each of the brands and their goals individually, I would like to note that the Zhenjiang Geely Holding Group is currently also working on manufacturing cell phones (https://www.kfz-betrieb.vogel.de/geely-boss-li-shufu-will-handys-bauen-a-1061610/) from 2023, as well as satellites in the future. (https://techwireasia.com/2021/10/chinas-geely-begins-production-of-satellites-for-its-self-driving-vehicles/ ) What synergy effects this will enable for the car manufacturer Geely is still open - but it remains exciting!
The Geely brand
Geely itself is a huge brand and intended for the mass market. Accordingly, it does not make sense to look at each car separately. Therefore, here is a screenshot of the current models from the company's website.
Prices start at 6,737€ and go up to 22,791€. The majority of these vehicles are classic internal combustion engines. However, there are also plug-in hybrids and 3 electric models. (According to the Chinese Geely website) Since I find these honestly not too exciting I have here for all interested simply three screenshots that show the sales figures of the models.
Source: http://www.geelyauto.com.hk/core/files/presentation/en/October%20Corporate%20Presentation.pdf
The Geometry brand
The Geometry A
No it is not about a new version of Tetris, it is about a new brand of Geely. So Geometry is a purely electronic brand of Geely. ( http://www.geelyauto.com.hk/core/files/financial/en/2021-01.pdf Pg. 49) Since its inception in 2019, the brand has introduced 3 models.
Namely, the Geometry A, Geometry C as well as the Geometry EX3. The Geometry A has already been available since 2019 and is a classic sedan. It actually looks quite chic and is the one limo pictured in the images below. (https://www.geometryauto.com/series/ge11 ) The price of this model is circa 16,046.43€ and it has a VMax of 150 km/h. The current maximum range available is quite usable at 600 km. In 2020, the brand already released another model, the Geometry C. This is an SUV crossover with a maximum range of 550 km, but again with a VMax of 150 km/h. What makes this so interesting is that it is already based on a platform that was developed with Volvo and is also used for the Volvo XC40. YEAH - the first synergy effects so which one notices ; ) This is available from 17.548,07€. And now it gets really exciting, in 2021 Geometry has introduced the EX3 for a whopping 7.900€! For this he has a range of only 322 km and is a compact SUV.
In 2019, Geometry sold 12,662 cars and in the Corona year 2020 even only 9,818. However, they have already easily caught up this year, so they have already sold 14,563 cars from January to September. (Source: https://www.chinamobil.ru/eng/geely/geometry/?view=sales )
I think it can be roughly summarized that Geely with Geometry should be similar to Opel. Selling cars for the average population at fair prices. So I consider Geometry as a nice-to-have, but not as a company I would buy shares of if it was a standalone company. The hype potential is just missing for me, especially since I doubt that the margins will be too high for cars that cost e.g. 7.900€...
The brand Lynk & Co
Yes, Lynk & Co is another car brand of Geely. But not only! So it is next to a joint venture of Geely and Volvo Cars much more a mobility service provider than a car manufacturer. This one is already active in Germany as well!
But now to the Lynk & Co 01. This is so to speak the main model, which is also offered here in Germany. A picture of this is attached below, is the one SUV ;) This one is available as a plug-in hybrid (42,000€) and as a full hybrid (35,000€). It is a classic city SUV I would say. However, there are no optional extras, everything is standard! In addition, it is only available in two colors, blue or black. Means the production can work very routinely and it must never be adapted something. As an example of the standard equipment I call times:
Numerous assistance systems (e.g. freeway assistant, Stauasisstent, distance cruise control, traffic sign recognition etc.)
Panoramic roof
Electronic seats with memory function
Adaptive LED headlights
Wireless Apple CarPlay/Android Auto (https://www.automotiveit.eu/cars/lynk-co-01-innovatives-abo-modell-mit-warteliste-343.html )
In short, actually everything that costs extremely much extra with most car manufacturers. More is nachzulesen under: https://www.lynkco.com/de-de/car/car-specifications-features#1a5ec65a-a17d-4fea-951e-05ed65b07d4d;4 Also to mention is that this is based on the platform of the Volvo XC40 so CMA. SYNERGY EFFECTS, YEAH! That's probably why it got 5/5 stars in the Euro NCAP crash test. (https://www.autozeitung.de/lynk-co-01-2017-preis-technische-daten-179915.html ) The only negative thing I found about this car was that the seats are partly uncomfortable because they are made from recycled fishing nets or similar.
For example, they offer a kind of rental model for 500€. Here you get a Lynk & Co 01. Within this 500€ are insurance, maintenance, car tax, repair and Co. there for 1,250 kilometers a month! (As I understand it each case lol) Lynk & Co sets on that one this car also with many friends etc. divides. This is made possible by the vehicle with a digital key can open / close and start. This can be distributed to any number of friends.
Alternatively, you can be a member without paying for a car per month. To what extent the prices are competitive I can not judge because I am not a member there. These vehicles are then vehicles of other members who have a car and make it available to others while not in use. Lynk & Co. is only the platform for vehicle rental in this case. (https://www.lynkco.com/de-de/terms-and-conditions/sharing ) Means if you have a vehicle in the rental model or bought it you can earn something in addition!
The advantage of Lynk & Co. compared to other car sharing providers I see here that they:
No risk because they do not have to maintain a fleet which generates costs.
All Lynk & Co 01 vehicles have the identical full equipment. Means you can not have bad luck with the equipment of the vehicle. (So in winter always heated seats and LED lights, yeah!)
Whether these are enough, however, is questionable, but it convinces me first. Nevertheless, it should be said that Lynk & Co. not only fascinates me, but has already reached over 27,000 users since its launch in 2020. 90% of these users have opted for a "subscription" or "user" model, i.e. against the purchase. (https://vision-mobility.de/news/lynk-co-ueber-27-000-clubmitglieder-in-zwei-jahren-95696.html ) So sounds like a good start and strong growth already! BULLISH!🚀🚀🚀🚀
App Link: https://apps.apple.com/DE/app/lynk-co/id1541599159
Zeekr brand
Zeekr, for me simply the highlight. However, due to its establishment on 15.04.2021, this has only one model. The next 3 years, however, more than 6 models are planned.
But the current model has it also already in Sich. Up to 700 kilometers of range, up to 544 hp (400 kW), a CW value of 0.23 and design from Sweden as well as cooperation of the ex-Bentley designer Sefan Sielaff, that sounds good. https://www.auto-motor-und-sport.de/elektroauto/geely-premium-e-autos-zeekr-001-tesla/ ) However, this model is to be delivered in China only from October 2021 and then other countries will follow at the beginning of 2022. Which countries is unfortunately not known, only that the production started successfully is apparently already sold out for this year 2021. (Which may also have been created by an artificial shortage... ) https://www.it-times.de/news/geely-001-als-erstes-e-auto-der-marke-zeekr-fuer-2021-ausverkauft-139065/
The Zeekr 001:
To name a few highlights of the car:
PERFORMANCE (544 hp as well as 3.8s for 0-100 km/h).
Lifetime over-the-air updates (including for autonomous driving).
Facial recognition (Unfortunately without justification, maybe yes "only" for different user profiles in the car like Mercedes with the fingerprint).
Use of Geely's new SEA (Sustainable Experience Architecture) platform (https://ecomento.de/2021/04/20/chinesische-elektroauto-marke-zeekr-internationale-ambitionen/ ) => vehicles with this platform are prepared for fully autonomous driving. More information then in the last chapter of this DD.
Automatic air suspension which can change from 11.7 cm ground clearance to 20.5 cm
Fast charging:
o Power for 120 km in 5 minutes
o From 0 to 80% in 30 minutes (with a 100 kWh battery!)
o Charging power up to 360 kW
Fully automated production of the body shell as well as painting in a 5G factory in China (https://insideevs.de/news/541752/zeekr-001-produktionsstart-in-china/ )This is supposed to build 300,000 cars/year at one time. (https://www.automobil-industrie.vogel.de/zeekr-001-verspricht-ueber-700-kilometer-reichweite-a-1068141/ )
And last but not least, from my point of view a really interesting exterior design and above all (finally) a Chinese that looks noble and modern in the interior. (Best to have a look at the video: https://www.youtube.com/watch?v=1X132vSIXcI&ab_channel=WalkaboutRojo )
And what must not be forgotten, the price. This is supposed to be about 46.000$, unfortunately it is not clear to me if this is the price before or after the electric car promotion in China etc.. (https://www.ixbt.com/news/2021/10/14/700-3-6-zeekr-001-tesla.html )
In summary, one can say that this brand wants to compete with Tesla and Co. as well as the company's own high-end electric manufacturer Polestar, and to match this, Zeekr also wants to build its own charging network in China. This is to start first in 10 Chinese cities with 360-kw charging stations as well as with external charging stations in 272 cities. (https://vision-mobility.de/news/geely-tochter-zeekr-startet-produktion-des-001-93540.html ) I am extremely BULLISH for this brand and am excited about what is to come!🚀🚀🚀🚀
Autonomous driving
Now, as touched on with the Zeekr brand, Geely has a tight schedule for autonomous driving. You can see this in the slide here and I don't think I need to say too much about it. This plan applies to all of the Geely company's brands and should eventually be feasible through the collaboration with Volvo (or Zenseact).... We will see. The only interesting thing is that they actually published an interesting video of the Zeekr 01. This shows that this is still a bit slow when turning (if I compare that with the Mercedes Parkpilot which is brutally fast when parking lol) but otherwise now is already quite useful. https://www.youtube.com/watch?v=Wx-MbKtIiwg&ab_channel=GeelyGroup
http://www.geelyauto.com.hk/core/files/presentation/en/October%20Corporate%20Presentation.pdf
Critical view
What you have to keep in mind is that the stock market value of Geely has fluctuated extremely the last few years which is why I personally have a hard time saying what the fair value is and buying now would be a risky long-time play. I am extremely bullish for the future, but to what extent the stock market value will increase is questionable.
Furthermore, the group currently has to make high investments. Be it in electromobility, autonomous driving but also car sharing offers, etc. This should be feasible with the synergy effects with the parent company mentioned a few times, but it is still a burden on the core business.
The fact that the electric models Geometry A, Geometry C and Emgrand EV (one of the three e-cars) only accounted for 3% of sales in 2021 in January and February also shows that high investments are still necessary in electric mobility. (https://www.electrive.net/2021/03/15/geely-soll-batteriefabrik-mit-42-gwh-in-ganzhou-planen/ ) Although the sales in September 2021% increased by 83% for e-cars and hybrids, it is still relatively small. (http://www.geelyauto.com.hk/core/files/presentation/en/October%20Corporate%20Presentation.pdf , P.2)
And fitting to the electric mobility it should be said that Geely already planned in 2015 with the "Blue Geely Initiative" that 90% of the sales of the brand should be electric vehicles. Thus, the promises of electric vehicles and autonomous driving are cool, but questionable to what extent they are realistic.
In addition, the company has a confusing corporate structure and the usual China stock risk applies, since you buy shares in a company on the Cayman Islands and have to hope that everything continues to go well with these constructs.
Conclusion
Oke, so what do we buy here now and is it any good?
A company with four brands of which two at least make me extremely horny for the future and the other two are more Boomer Plays which however are not bad either. => BULLISH🚀🚀
In addition, a company which uses synergy effects through the huge parent company about everywhere it is possible. This should continue to prove useful in the future. => BULLISH🚀🚀
This huge parent group is also being used to secure battery cell supplies. Thus, the Geely Technology Group of the parent company plans to build a battery factory in China for 3.87 billion euros with an annual capacity of first 12 GWh and later 42 GWh. Thus, this should be ensured since there is also a joint venture with CATL and one with Farasis Energy. (https://www.electrive.net/2021/03/15/geely-soll-batteriefabrik-mit-42-gwh-in-ganzhou-planen/ ) => BULLISH🚀🚀
What about future topics such as autonomous driving, electromobility and car sharing? All there and big plans! => BULLISH🚀🚀
How are current sales developing? It is increasing for the most part although the Chinese car market is declining. Moreover, other markets will be added in the near future. => BULLISH🚀🚀
Are the electric cars which are on m market so far selling at all? Yes, see the slide below (except for the Corona year 2020) and their range can definitely keep up. => BULLISH🚀🚀
Are they relying only on electric mobility? No! Den they set depending on the brand also first on plug-ins/combustion (Geely & Lynk & Co) and also works on hydrogen cars. These hydrogen cars are currently in the testing phase and are already driving, not like the trucks from Nikola, lol. (https://autonews.gasgoo.com/m/70018655.html ) => BULLISH🚀🚀
For those who want to see some more slides, you can view more here: http://www.geelyauto.com.hk/core/files/presentation/en/October%20Corporate%20Presentation.pdf
Original DD:
