股 票 研 [Table_Title] Company Report: Geely Automobile (00175 HK) Toliver Ma 马守彰 究 (852) 2509 5317 Equity Research 公司报告： 吉利汽车 (00175 HK) [email protected] 22 March 2018 [Table_Summary] FY2017 Results in line, Maintain “Buy” 2017财年业绩符合预期，维持“买入” Geely Auto’s 2017 net profit was up 108.0% yoy to RMB 10,634 million. 公 Rating:[Table_Rank ] Buy Excluding the one-off gain from the disposal of a subsidiary, underlying Maintained 司 earnings was RMB 10,071 million, aligning with market consensus and our 报 consensus. In 2017, top-line revenue increased 72.7% yoy to RMB 92,761 评级： 买入 (维持) million due to an increase in vehicle sales of 62.1% yoy and increased 告 blended ASP by 6.6% on the improved sales mix. Gross margin was up 1.1 6[Table_Price-18m TP目标价] : HK$32.10 Company Report ppts to 19.4%. Operating margin expanded 2.2 ppts as distribution costs and Revised from 原目标价: HK$34.54 administration costs have been well controlled, seeing per revenue ratio drop yoy by 0.3 ppts and 1.6 ppts, respectively. Net margin improved 1.9 ppts to Share price 股价: HK$25.800 11.5%. We forecast shareholders’ profit to increase 31.3% / 29.1% / 21.2% in Stock performance 2018 to 2020, respectively. The strong growth reflects our optimism on the 股价表现 Company, with the support of both Geely and Lynk & Co. brand. We forecast [Table_QuotePic] vehicle sales to increase 36.7% yoy in 2018, more aggressive than the 180.0 % of return management's guidance. 160.0 140.0 We see Geely Auto continuing to strengthen in the self-owned market and 120.0 证 able to expand to other segments through Lynk & Co with cooperation with 100.0 告 券 80.0 Volvo and the parent company. We reiterate our “Buy” rating for Geely 60.0 研 报 Auto, but slightly revise downwards TP to HK$32.10, representing 17.0x 40.0 2018 PER and 13.2x 2019 PER. Our valuation is above both its long-term 究 究 20.0 average and sector PER. However, given Geely Auto’s leading position in the 报 self-owned market and its aggressive growth outlook, we believe the 0.0 研 (20.0) 告 premium is well justified. Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 券 Series1 Geely Automobile Equity Research Report 吉利汽车 2017 年股东净利润同比上升 108.0％至人民币 106.34 亿元。扣除处置子公司一 证 次性收益，核心盈利为人民币 100.71 亿元，符合市场及我们预期。2017 年，收入同比增 [Table_PriceChange] Change in Share Price 1 M 3 M 1 Y [Tab 长 72.7%至人民币 927.6 亿元，主要是由于汽车销售同比增长 62.1% 以及销售结构改善 股价变动 1 个月 3 个月 1 年 使得综合平均售价增长 6.6%。毛利率提升 1.1 个百分点至 19.4%。营业利润率扩大 2.2 le_I Abs. % 8.6 1.2 127.9 汽 个百分点，因分销成本和管理费用得到较好控制，占收入百分比分别同比降低 0.3 个百分 绝对变动 % nfo1 Rel. % to HS Index 车 点和 1.6 个百分点。净利润率提升 1.9 个百分点至 11.5%。 8.7 (5.8) 100.2 相对恒指变动 % 及 Avg. Share price(HK$) ] 我们预测 2018-2020 年股东净利分别增长 31.3% / 29.1% / 21.2%。有吉利和领克品牌的 25.5 25.2 20.5 平均股价（港元） 零 支持，强劲的增长反映我们对公司乐观的态度。我们预测汽车销量在 年同比增长 2018 Source: Bloomberg, Guotai Junan International. 部 36.7%，较管理层的指引更为激进。 件 我们看到吉利汽车继续巩固在自主品牌市场的地位，及能够通过领克品牌与沃尔沃和母公 行 司的合作，并扩大至其他细分市场。我们重申吉利汽车的“买入”评级，但将目标价下调至 业 32.10 港元，相当于 17.0 倍 2018 年市盈率和 13.2 倍 2019 年市盈率。我们的估值高于其 长期平均值和行业市盈率。然而，鉴于吉利汽车在自主品牌的领先地位及其积极的增长前 景，我们认为该溢价是合理的。 Automobiles & Components Sector Automobiles & Components Y[Table_ear End Turnover Net Profit EPS EPS PER BPS PBR DPS Yield ROE [Tab 年结Profit ] 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 le_I 12/31 (RMB m) (RMB m) (RMB) (△ %) (x) (RMB) (x) (RMB) (%) (%) 2016A 53,722 5,112 0.580 125.7 39.8 2.776 8.3 0.120 0.5 23.3 nfo2 2017A 92,761 10,634 1.198 106.6 17.4 3.908 5.3 0.290 1.4 36.1 中] 2018F 115,304 13,654 1.529 27.6 13.7 5.146 4.1 0.390 1.9 34.0 2019F 131,489 17,582 1.968 28.7 10.6 6.803 3.1 0.508 2.4 32.9 吉外 2020F 146,789 21,380 2.394 21.6 8.7 8.797 2.4 0.623 3.0 30.7 利运 汽 [Table_BaseData]Shares in issue (m) 总股数 (m) 8,972.9 Major shareholder 大股东 Geely Holding 42.7% 输 Market cap. (HK$ m) 市值 (HK$ m) 231,500.8 Free float (%) 自由流通比率 (%) 57.3 车 3 month average vol. 3 个月平均成交股数 (‘000) 57,885.5 FY18 Net gearing (%) FY18 净负债/股东资金 (%) Net Cash 52 Weeks high/low (HK$) 52 周高/低 (HK$) 29.800 / 10.080 FY18 Est. NAV (HK$) FY18 每股估值（港元） 34.5 Source: the Company, Guotai Junan International. Geely Automobile (00175Geely HK) Automobile See the last page for disclaimer Page 1 of 8 [Table_PageHeader]Geely Automobile (00175 HK) FY2017 Results Review ] 1 r a M t h g i R _ e l b a T [ Geely Auto’s (“the Company”) 2017 net profit was up 108.0% yoy to RMB 10,634 million. Excluding the one-off gain of the disposal of a subsidiary, underlying earnings was RMB 10,071 million, aligning with market consensus and our consensus. In 2017, top-line revenue increased 72.7% yoy to RMB 92,761 million due to 1) an increase in vehicle sales of 62.1% yoy thanks to strong sales from key models (Boyue, Emgrand GS, Emgrand GL and Vision SUV), which contributed 55.2% of total sales (vs. 32.5% in 2016) and 2) an increase in blended ASP by 6.6% on improved sales mix, also due to the strong sales from key models. March 2018 Cost of goods sold increased less than revenue growth on efficiency gain through economies of scale, as a result, gross margin 2 2 was up 1.1 ppts to 19.4%. Operating margin expanded 2.2 ppts to 13.2%, reaching a historical high, as distribution costs and administration costs have been well controlled, seeing per revenue ratio drop yoy by 0.3 ppts and 1.6 ppts, respectively. Net margin improved 1.9 ppts to 11.5%. The Company proposed dividend of HKD 0.29 per share, represents a payout ratio of 20.3%, higher than 18.8% in 2016. Table-1: Summary of 2017 Results of Geely Auto 2017 2016 YoY 2H17 1H17 HoH Revenue 92,761 53,722 72.7% 53,337 39,424 35.3% COGS (74,779) (43,880) 70.4% (42,910) (31,870) 34.6% Gross profit 17,981 9,842 82.7% 10,427 7,554 38.0% Distribution and selling expenses (4,056) (2,503) 62.1% (2,318) (1,737) 33.4% Administrative expenses (2,923) (2,560) 14.2% (1,742) (1,181) 47.6% Operating profit 12,232 5,910 107.0% 7,596 4,636 63.8% ] 2 r a M t h g i R _ e l b a T [ Finance costs, net (35) (30) 17.0% (26) (9) 180.2% Other income 1,229 1,131 8.6% 568 661 -14.2% Share-based payments (28) (42) -34.3% (14) (14) -2.3% Share of results of Asso. and JV 42 (9) -588.5% 7 36 -81.0% Gain on disposal of subsidiaries / JV 563 376 49.7% - - n.a. EBT 12,774 6,204 105.9% 7,464 5,310 40.6% Income tax (2,039) (1,034) 97.2% (1,115) (923) 20.8% Profit for the period 10,735 5,170 107.6% 6,349 4,386 44.7% Profit for equity shareholders 10,634 5,112 108.0% 6,290 4,344 44.8% Non-controlling interests 102 58 75.9% 59 43 37.4% Underlying profit (before disposal gain) 10,071 4,737 112.6% 6,290 4,344 44.8% Basic EPS (RMB) 1.1980 0.5796 106.7% 0.7103 0.4877 45.6% Diluted EPS (RMB) 1.1614 0.5733 102.6% 0.6846 0.4768 43.6% Source: the Company, Guotai Junan International. (00175 HK) Table-2: Key Operating Data 2017 2016 YoY 2H17 1H17 HoH Key Operating Data Government subsidies 905 802 12.8% 405 501 -19.2% Sale volume (unit) 1,241,104 765,851 62.1% 710,477 530,627 33.9% 吉利汽车 Domestic sales (units) 1,216,058 744,072 63.4% 689,277 526,781 30.8% Export sales(unit) 25,046 21,779 15.0% 21,200 3,846 451.2% ASP(RMB/unit) 73,550 68,993 6.6% 75,072 73,077 2.7% Inventory 6,027 3,066 96.6% n.a. n.a. n.a. Account Receivable 33,478 29,041 15.3% n.a. n.a. n.a. Account Payable 47,533 39,779 19.5% n.a. n.a. n.a. Key Ratio ppts ppts Geely Automobile Gross profit margin (%) 19.4% 18.3% 1.1 19.5% 19.2% 0.4 Operating profit margin(%) 13.2% 11.0% 2.2 14.2% 11.8% 2.5 Net profit margin (%) 11.5% 9.5% 1.9 11.8% 11.0% 0.8 Distribution costs/Revenue(%) 4.4% 4.7% (0.3) 4.3% 4.4% (0.1) Admin costs/Revenue(%) 3.2% 4.8% (1.6) 3.3% 3.0% 0.3 Effective tax rate(%) 16.0% 16.7% (0.7) 14.9% 17.4% (2.4) Source: the Company, Guotai Junan International. Figure-1: Geely’s Monthly Sales Volume Figure-2: Geely’s Gross Margin 2016 2017 Units 2018 2017 growth 22.0% 180,000 2018 growth 180% 21.0% 21.5% 160,000 160% 140,000 140% 20.8% 20.0% 120,000 120% 20.0% 100,000 100% 19.0% 19.4% 80,000 80% 18.0% 60,000 60% 18.3% 18.2% 18.2% Report 40,000 40% 17.0% 20,000 20% - 0% 16.0% Jul Company Apr Oct Jan Jun Feb Mar Sep Aug 2014 2015 2016 2017 2018F 2019F 2020F Nov Dec May Source: the Company, Guotai Junan International.