Geely Automobile Holdings (0175.HK) (Geely Automobile/The Group) announced its 2021 first half financial results with revenue reaching RMB 45 billion, an increase of 22% compared to the same period last year. Profits excluding share-based payments reached RMB 3.02 billion, an increase of 31% compared to the same period last year. Net profits for the first half reached RMB 2.41 billion and profit attributable to stockholders reaching RMB 2.38 billion.
From January to June 2021, the Group total sales volume reached 630,237 units, an increase of approximately 19% YoY. Among those totals, the premium brand, Lynk & Co, sold 107,873 units, an increase of 96.98% YoY. This year marked Lynk & Co’s fifth year of sales on the Chinese market with cumulative sales exceeding 550,000 units. Driven by greater sales of higher value products, the Group continued improving its brand premium with an average selling price of of RMB 84,148 per vehicle in the first half of 2021, an increase of 10% YoY.
The company’s profit structure has also become more diversified. In the first half of 2021, joint ventures and partnerships contributed RMB 706 million in profit, accounting for 29% of net profits. Profits contributed from joint ventures Lynk & Co and Genius AFC, increased 62% YoY. Lynk & Co’s net profits increased 144% and Genius AFC increased 41%. The Group’s investment in technological R&D has also become a new avenue for profits. In the first half of 2021, technology licensing fees contributed RMB 637 million in profits, accounting for 26% of the company’s net profit.
The financial condition of Geely Automobile continues to be stable with ample cash flow available. The Group’s total cash flow in the first half of 2021 reached RMB 19.91 billion. Since 2019, debt-to-equity ratio of the company has remained below 50%, as of June 2021, debt-to-equity ratio of the company reached as low as 39.7%.
New energy vehicles continue to be a strong growth segment for the company. Sales of electrified vehicles from the Group increased 189% YoY in the first half of 2021. In the second half of 2021, the Group plans to introduce its GHS2.0 intelligent hybrid powertrain system, with an industry-leading thermal efficiency of 43.32% and fuel saving of 40%. The GHS2.0 hybrid powertrains will be installed on flagship Geely Auto brand models and within three years will be offered on 10 new models from the Group. Zeekr, a 51%-owned joint venture, also aims to deliver its first pure electric model, the Zeekr 001 to users in the second half of 2021. Pre-orders began for the model began in April 2021 and all deliverable units for 2021 were sold out within a month. Over 5,000 confirmed orders were received on the first day that order books were opened.
Overseas, the Group continues to accelerate its expansion with exports in the first half of 2021 reaching 53,422 units, an increase of 173% YoY. The expansion of Lynk & Co in Europe remains on schedule with successful deliveries to users in the Netherlands, Germany, Belgium, and Sweden. In the second half of 2021, Lynk & Co will continue its global expansion with further expansion into select Asian markets while Geely Auto continues to grow globally based on its latest product ranges.
The Group’s annual target of 1.53 million units for 2021 remains unchanged. The company has also announced that by 2025, it aims to achieve annual sales of 3.65 million units across the Geely Auto, Lynk & Co, Zeekr, and Geometry brands with electrified vehicles accounting for over 1 million of that total. In the next five years, Geely Auto Group will focus heavily on the promotion of its new GHS2.0 intelligent hybrid power train systems, plug-in hybrid vehicles, range-extended electric vehicles, and high-value mainstream pure electric models.