Company Report: Geely Automobile (00175 HK) Harry Chen 陈欢瑜 公司报告：吉利汽车 (00175 HK) +86 755 23976683 [email protected] 26 August 2013 国泰君安研究 Rapid Sales Growth in Next 12 months, Reiterate “Accumulate” 快速的销售增长将维持12个月，重申“收集”评级 GTJA Research GTJA 1H13 earnings beat the market forecasts. The earnings of Geely increased Rating: Accumulate 37.2% YoY, better than market expected, but in-line with our forecasts. Maintained Vehicle sales in 1H13 increased 18.5% YoY to 263,544 units, completing 评级： 收集 (维持)) 47% of sales target (560,000 units). Sales revenue of 1H13 increased 32.9% YoY, suggesting that the sales price of vehicles remained stable and product mix improved. ASP of Geely in 1H13 increased 11% YoY as a result of rapid 6-18m TP 目标价: HK$5.00 sales growth of Geely’s EC7 and SUVs. Gross profit margin in 1H13 improved Revised from 原目标价: HK$5.00 1.8pps YoY to 19.2%. Share price 股价： HK$4.010 Rapid sales growth is expected to maintain in the next 12 months. We expect Geely EC7 sales to peak in the middle of 2014 and then started to Stock performance decrease in 2H14. Geely’s SUVs sales showed sight of slowing down mainly 股价表现 due to relatively weaker competitiveness and brand image for SUVs. Therefore, we expect vehicle sales of Geely to grow rapidly in the next 12 24,000 5.00 months. 23,000 Reiterate “Accumulate” Rating. The Company is trading at the valuation 22,000 4.00 that is lower than its historical average but higher than industry average. 21,000 According to historical trend, we expect Geely’s share to increase in August HK$ and reach 12x 13PE in the year end of 2013. Therefore we maintain Geely’s 20,000 3.00 “Accumulate” rating and TP of HKD 5.00, representing 12x 13PE, 10x 14PE, 19,000 1.8x 13PB and 1.5x 14PB. 18,000 2.00 ) Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 2013 年上半年的盈利好于市场预期。公司 2013 年上半年比去年多赚 37.2%，好于 HSI Geely 市场预期，但是符合我们预期。公司上半年汽车销售同比增长 18.5%到 263,544 辆， 00175 00175 HK 完成全年销售目标 56 万辆的 47%。公司销售收入同比大升 32.9%，反映公司产品价 ( 格稳定和产品组合持续改善。由于 EC7 和 SUV 车型销售增长带动，公司的平均出厂 Change in Share Price 1 M 3 M 1 Y 股价变动 1 个月 3 个月 1 年 价同比提高 11%。公司的毛利率同比提到 1.8 个百分点到 19.2%。 Abs. % 吉利汽车 绝对变动 销售的快速增长将维持 12 个月。我们预计吉利 EC7 的销售将在 2014 年中见顶，然 % 21.9 4.7 51.3 Rel. % to HS index 后在 2014 年下半年开始下滑。而吉利的 SUVs 销售则逐渐出现疲软状态，主要是因 相对恒指变动 % 22.1 8.3 42.7 Avg. share price(HK$) 为车型竞争力和品牌形象相对较差。因此我们预测公司的汽车销售在未来 12 个月内 平均股价（港元） 3.5 3.5 3.6 Source: Bloomberg, Guotai Junan International. 仍然能维持快速增长。 重申“收集”评级。现在公司的估值略低于其历史水平和但是高于同业平均。根据 Automobile Geely 其历史季节性波动，我们认为吉利的股价从 8 月开始回升，在年底的时候将到达 12 倍 13 年 PE。因此我们维持公司“收集”评级和目标价 5.00 港元，相当于 12 倍 13 年 PE、10 倍 14 年 PE、1.8 倍 13 年 PB 和 1.5 倍 14 年 PB。 Year End Turnover Net Profit EPS EPS PER BPS PBR DPS Yield ROE 年结 收入 股东净利 每股净利 每股净利变动 市盈率 每股净资产 市净率 每股股息 股息率 净资产收益率 12/31 (RMB m) (RMB m) (RMB) (△%) (x) (RMB) (x) (RMB) (%) (%) 2011A 20,965 1,543 0.192 11.0 16.8 1.364 2.4 0.028 0.9 16.1 2012A 24,628 2,040 0.263 37.2 12.4 1.771 1.8 0.039 1.2 17.5 2013F 32,285 2,658 0.336 27.5 9.3 2.155 1.5 0.055 1.8 18.1 2014F 35,914 3,048 0.377 12.2 8.3 2.635 1.2 0.064 2.0 16.9 2015F 37,785 3,274 0.404 7.3 7.7 2.940 1.1 0.065 2.1 15.0 Shares in issue (m) 总股数 (m) 8,273.3 Major shareholder 大股东 Mr. Li Shufu 50.3% Market cap. (HK$ m) 市值 (HK$ m) 31,934.9 Free float (%) 自由流通比率 (%) 29.3 3 month average vol. 3 个月平均成交股数 (‘000) 57,878.8 13 Net gearing 13 年净负债/股东资金 (%) net cash 52 Weeks high/low (HK$) 52 周高/低 4.750/2.360 13 ROA 13 年资产回报率（%） 6.8 Source︰the Company, Guotai Junan International. Company Report See the last page for disclaimer Page 1 of 11 1H13 earnings were better than market expected. The earnings of Geely increased 37.2% YoY, better than market expected, but in-line with our forecasts. Vehicle sales in 1H13 increased 18.5% YoY to 263,544 units, completing 47% of sales target (560,000 units). Sales revenue of 1H13 increased 32.9% YoY, suggesting that the sales price of vehicles remained stable and product mix improved. Benefiting from the demand surge in Russia and Ukraine, export sales grew 25.9% YoY, accounting for 19% of total sales. ASP of Geely in 1H13 increased 11% YoY as a result of rapid sales growth of Geely’s EC7 and SUVs. Gross profit margin in 1H13 improved 1.8pps YoY to 19.2%. Administration costs and selling expenses as a percentage of revenue decrease year-over-year. Net profit margin improved 0.3pps YoY to 9.4%. 26 August 2013 Table-1: Financial Result of Geely in 1H11-1H13 1H12 2H12 1H13 YoY Key financial data (Rmb mn) Revenue 11,177 21,108 14,855 32.9% COGS (9,237) (16,835) (12,008) 30.0% Gross profit 1,940 4,273 2,847 46.7% Distribution costs (659) (1,278) (821) 24.5% Admin costs (578) (1,133) (747) 29.2% Share-based payments (64) 1 (46) -27.7% Share of Results of Associates (1) (0) (4) 167.1% Other Income 747 133 552 -26.1% Finance Costs (124) 39 (57) -54.4% Operating profit 703 2,742 1,279 82.0% EBT 1,261 2,034 1,725 36.8% Provision for Income Tax (234) (392) (323) 38.1% Profit for the period 1,027 1,642 1,402 36.5% Non-controlling interests 7 3 3 -52.4% Profit for equity shareholders 1,020 1,639 1,398 37.2% Basic EPS (RMB) 0.137 0.216 0.169 23.9% Diluted EPS (RMB) 0.125 0.211 0.162 29.4% Key Operating Data YoY Government subsidies 634 149 485 -23.6% Sale volume (unit) 222,390 348,603 263,544 18.5% Domestic sales (units) 182,329 240,664 213,106 16.9% Export sales(unit) 40,061 107,939 50,438 25.9% Revenue per Car(RMB/unit) 48,979 60,549 56,366 15.1% Key Ratio △ pps ) Gross profit margin (%) 17.4 20.2 19.2 1.8 Operating profit margin(%) 6.3 13.0 8.6 2.3 EBT margin(%) 11.3 9.6 11.6 0.3 00175 HK ( Net profit margin (%) 9.1 7.8 9.4 0.3 Selling costs/Revenue(%) 5.9 6.1 5.5 (0.4) Admin costs/Revenue(%) 5.2 5.4 5.0 (0.1) Effective tax rate(%) 18.6 19.3 18.7 0.2 Source: the Company, Guotai Junan International Automobile Geely Sales Analysis and Forecasts China PV sales grew rapidly and market share of self-owned brand vehicle sales dropped. In the first 7 months of 2013, China PV sales increased 13.4% YoY to 9.902 million units. Rapid PV sales growth in the first 7 months of 2013 was mainly due to the recovery of China economy and new car launch. We expect the PV sales to increase 15% YoY in 2013. Among different brands, self-owned brand vehicle’s sales grew 12.9% YoY in the first 7 months of 2013, slower than industry average. As a result, market share of self-owned brand vehicle sales decreased 0.1pps to 40.5%. Geely’s vehicle sales grew rapidly domestically and internationally. In the first 7 months of 2013, vehicle sales of Geely increased 18.6% YoY to 297,466 units, faster than industry average, completing 53% of sales target. We expect Geely to reach its sales target of 2013 of 560,000 units. Both domestic and export sales increased rapidly in the first 7 months of 2013. In the first 7 months of 2013, domestic and export sales of Geely increased 17.1% YoY and 24.7% YoY, respectively. Export sales of Geely grew faster than industry average, accounting for 21.1% of Geely’s total sales, up 1.0 pps YoY. Company Report See the last page for disclaimer Page 2 of 11 Figure- 1: China PV Sales and Sales Growth Figure- 2: Market Share of Different Brands in China units PV Sales PV Sales Growth 100% 2.6% 2.7% 2.8% 2.8% 2.7% 3.2% Others 20,000,000 60% 8.4% 8.1% 8.4% 8.8% 8.1% 9.3% 52.9% 9.7% 10.1% 10.8% 12.0% 11.6% 80% 12.6% French 16,000,000 50% 14.1% 14.4% 16.4% 18.2% 33.3% 40% 18.4% 12,000,000 19.6% Korean 29.6% 60% 30% 21.2% 19.8% 22.3% 19.4% 16.1% 18.8% American 8,000,000 14.9% 26 August 2013 20% 13.4% 40% 6.9% 7.1% 7.2% 4,000,000 5.4% 10% German 43.8% 44.7% 42.1% 41.8% 0 0% 20% 40.6% 40.5% Japanese 2007 2008 2009 2010 2011 2012 2006 Self-owned July13 July12 0% - - brand - - Jan Jan July July Jan Jan 2009 2010 2011 2012 2012 2013 Source: CAAM, Guotai Junan International.