Li Shufu's most challenging leg

Li Shufu has stepped down. What kind of date did he pick to do so? The very day the financial report was released.

On August 17, Geely released its half-year report, with revenue hitting 173.6 billion yuan and core profit reaching 9.68 billion yuan, up 46% year on year, both hitting all-time highs.

Just imagine the scene where the boss announces his abdication on the most glorious day of the company.

First, let's talk about this report card. In the first half of the year, Geely sold 1.423 million vehicles, roughly flat with the same period last year; it didn't sell more cars, but earned more money.

For every vehicle sold, the core profit recorded in the books reached 6,806 yuan, up 45% year on year. Excluding fluctuating figures such as exchange gains and losses and asset impairment, Geely's business has reached its best level in history.

At the performance meeting, Li Shufu himself read through this report card from start to finish:

Listed in 2005 with a share price of HK$0.4 and a market value of HK$1.6 billion; by August 12, the share price stood at HK$18 and the market value reached HK$194.8 billion; dividends to shareholders have risen from HK$40 million to HK$5.4 billion.

That's exactly what he said: the financing received is far less than the dividends distributed. An old man who has been in the automotive industry for 40 years read out the share price 21 years ago in front of the camera very carefully.

He handed over the position of chairman at a time when both market value and profit hit record highs. All media reports say so, and they also mention that Li Shufu picked a perfect day.

I don't think the accounts can be calculated that way.

According to the calibre of the report, the net profit attributable to shareholders in the first half of the year was 9.091 billion yuan, down 2% year on year; the 46% increase and 2% decrease are entirely caused by exchange rate differences.

Exchange rates are like tides. Last year, the rising tide boosted Geely's book profit by 3.63 billion yuan; this year, the ebbing tide, together with impairment losses, eroded about 600 million yuan. Adding the two sides together, 4.2 billion yuan vanished.

This is not an occasional case. I specifically checked that the first quarter also showed two different faces: the reported profit dropped by 26.56% year on year, while the core profit excluding exchange rate factors rose by 31%.

In other words, the core calibre is the unvarnished real face, while the report calibre is a made-up look. For Geely's report card, the unvarnished figure is the real one.

Which face did Li Shufu actually pick?

From the perspective of core calibre, he did choose the best time point, but the better the report card looks, the harder it is for the successor to deliver results. By this time next year, the new management team will face a year-on-year comparison base of 9.68 billion yuan.

Geely's management is well aware of this. As Gui Shengyue said at the performance meeting: "Although this financial report is eye-catching, it is not amazing enough."

Domestic sales posted a double-digit decline in the first half of the year. In July, the total retail sales of the entire industry dropped by 20.9%, and prices of chips and raw materials are all on the rise.

Exports are the only incremental engine, with 474,000 units sold, up 158% year on year. The volume sold in half a year has already exceeded the total for the whole year of 2025.

For every 3 Geely vehicles sold, 1 is exported to overseas markets. The company has also raised its full-year export target from 640,000 units to 920,000 units.

Putting all these facts together, the timing becomes quite thought-provoking.

Li Shufu did not make this decision on a whim. On June 5, Geely's announcement had already previewed this succession, with a written long-term succession plan in black and white. Everything was arranged long ago, but he chose this specific time point to make the handover.

He handed over one position, but what he holds tightly in his hand is the real core of this handover.

......

What is it? I think there are three key accounts. The first one is the operating right.

On August 18, the resignation takes effect. He stepped down from two positions: Chairman of the Board and Executive Director. The chairman presides over the board, while the executive director is in charge of daily operations. Resigning from both positions at the same time means he has given up both the operation and governance platforms.

The reason given in the announcement is that he will devote more time to his other businesses, and it also mentions that this arrangement is to cooperate with the long-established succession plan of the company.

His other businesses cover a wide range of fields. The holding group also owns Volvo, Lotus, Polestar, 30 self-developed satellites in orbit, and the online car-hailing platform Caocao Mobility on the ground.

The second one is the control right.

This account needs to be analyzed separately. The equity structure of Geely Auto is as follows: Zhejiang Geely Holding Group holds 36.62% of the shares, making it the largest shareholder.

Li Shufu personally holds 2.04% of the shares; within the holding group, Li Shufu alone accounts for 82.23% of the equity. After three layers of penetration, the steering wheel finally stays in the same hand.

This holding group itself is not listed. In addition to the aforementioned companies, it also holds the position of the largest shareholder of Mercedes-Benz Group.

Li Shufu resigned from his positions in the listed company, but he kept his position as the chairman of the holding group.

There is another sentence in the announcement that seems intended to convince the public: after the resignation, he has no current plan to reduce his shareholding in the company. In other words, the position can be handed over, but the shares will not be given up.

The third one is the cultural right.

Geely granted him the title of Honorary Chairman for Life. It sounds prestigious, but the announcement immediately adds that this title is honorary in nature and does not form part of the company's corporate governance structure.

The honor is granted, but the power is retained. No matter how prominent the title is, without a seat on the board or participation in governance, it is nothing more than a pure trophy.

Li Shufu specifically mentioned at the performance meeting that the three-tier governance structure needs to operate effectively and transparently.

The three-tier governance structure consists of the holding group, the listed company and the management, each responsible for its own part of the work.

Putting these three accounts together, the whole picture becomes clear. Akio Toyoda also handed over his position in 2023. On a racetrack in Thailand, he casually told Koji Sato that he would be the next president.

Sato was stunned on the spot, thinking the boss was joking. The Toyoda family held less than 2% of the shares at that time, not even ranking among the top ten shareholders. But after Akio Toyoda stepped down, his influence did not diminish at all, relying on the weight of the Toyota brand itself.

Li Shufu's situation is different. His direct and indirect shareholding exceeds 40%, which he firmly holds. Relying not only on shares, but also on a complete set of systems: three-tier governance structure, honorary chairman for life, the founder has transformed from a personal symbol to an institutional symbol. His weight remains, but the carrier has changed.

At this point, there is another detail worth noticing. An Conghui, who took over as chairman, also serves as the CEO of Geely Holding Group.

The CEO of the holding group is in charge of the board of the listed company, which means he is supervising himself.

Geely has made preparations for this. The independent non-executive directors will specifically keep an eye on potential conflicts of interest that may arise from this arrangement.

Gui Shengyue also added that 0175 (Geely Auto's stock code) is the only listed company where An Conghui serves as chairman, which means all automotive resources under the Geely system will be integrated into this platform in the future.

Therefore, in this handover, the driving seat has been vacated, but even the navigation is still controlled by Li Shufu.

The family side is also making arrangements. Li Shufu's son Li Xingxing and daughter Li Ni did not enter the listed company, but set up their own business in the holding group and investment sectors.

Li Xingxing holds the controlling stake in Chengxing Co., Ltd., and the brother and sister are also pushing Fengwo Co., Ltd. to go public on the A-share market. The second generation is in charge of investment, while professional managers are in charge of operations, and the two groups of people follow their own paths.

The position is handed over, the shares are still retained, and the steering wheel is firmly held. Among the three accounts, only one is given away, and the remaining two still belong to him.

......

Then why is An Conghui the right person to take over the position?

In 1996, An Conghui graduated from school and joined Geely. At that time, Geely was still in the motorcycle business, and the automobile business was something in the future.

In the past 30 years, he has served as project commander-in-chief, general manager, vice president and president. He led the integration after the acquisition of Volvo, and in 2017 he helped Geely achieve annual sales of over 1 million units.

The Lynk & Co brand was launched in Berlin, Germany in 2016, an event he organized entirely by himself. This was the first time a Chinese automotive brand held a global launch event in the birthplace of the automotive industry. The SEA vast architecture, the pure electric platform shared by Zeekr, Galaxy and Lynk & Co, was also implemented under his leadership.

He led Zeekr to grow from scratch to an annual sales volume of 170,000 to 180,000 units, and orchestrated the move of Zeekr from US-listed status to delisting and merging into Geely Auto after one year and seven months.

After sitting in the co-pilot seat for 30 years, the day he was officially promoted, the steering wheel was not yet his, but none of his experience over the years was wasted.

Then let's look at the person who took the position of CEO: Gan Jiayue, born in 1981, joined Geely in 2003. He started as a financial manager, and then successively served as director of the financial management department, senior vice president and general manager of the procurement company, all positions related to figures and costs.

In 2021, he took over as CEO of Geely Auto Group, becoming the first post-80s generation to hold this position.

In June this year, within a week, he successively took the position of chairman of Zeekr and Lynk & Co. On August 17, he was also appointed as the CEO of the listed company.

A person with a financial management background taking charge of daily operations shows that Geely has passed the stage of burning money for expansion, and will focus on cost control in the future.

Both of them have grown up within the Geely system, and there are no airborne executives. Gui Shengyue was transferred from CEO to Vice Chairman, and Li Donghui remains as Executive Director. The combination of the old, middle-aged and young generations ensures the continuity of strategy.

I have seen some people comment that this is a major breakthrough in the development of China's private economy to date. An Conghui put it plainly: to take over this baton well and pass it on well, inheritance is not simply inheriting a position.

One person has 30 years of experience in product development, the other has 20 years of experience in financial management. This combination is by no means randomly arranged.

Putting their resumes together, the exam paper is revealed. The core issues Geely will face in the future are undoubtedly cost control, efficiency improvement and overseas expansion.

Li Shufu once said at the Chongqing Forum that redundant entities should be shut down, merged and restructured in an orderly manner. After taking over, An Conghui repeated this statement, saying that some companies and projects will be shut down and restructured to reduce unnecessary internal transactions and duplicate construction.

This principle is a lesson Geely learned from the 7 billion yuan debt crisis of Ji Yue.

In December 2024, Ji Yue, a joint venture brand of Baidu and Geely, suddenly collapsed. After Baidu cut off its supply of support, the company was dissolved immediately. Geely has suffered losses from the situation where multiple brands operate independently.

Interestingly, this exam paper is being completed by automakers all over the world.

Toyoda handed over the position of president to Koji Sato in 2023, and then replaced him with Kenta Nishi in February 2026. For two consecutive times, the president position was not given to a member of the family. Kenta Nishi has a CFO background and once served as Akio Toyoda's secretary. This time, the position was directly handed over to a person who is good at financial management.

The two automotive giants in China and Japan made the same choice at almost the same time. This coincidence itself shows that the industry has reached a moment when it is time to calculate the overall accounts.

Therefore, the co-pilot being promoted to the driving seat and the financial expert taking the wheel is not a personnel arrangement unique to Geely. The queue of similar cases stretches from Baoding to Shenzhen.

.......

Wei Jianjun of Great Wall Motors, 62 years old, has his successor still rotating in the position of chairman assistant, not even a seat on the board. Institutions commented that: The decline in profit can be quantified, but the uncertainty of succession cannot be modeled.

Wang Chuanfu of BYD, 60 years old, took a different path.

In the past two years, he has stepped down from positions in dozens of subsidiaries. At the general meeting of shareholders in June this year, an investor asked him directly what would happen to BYD after he retires.

His answer was that BYD does not rely on a single founder to support its operation. 120,000 engineers and a complete internal talent echelon are the core assets. A complete system will replace an individual, and the chairman position has not been handed over yet.

Seres is passing the scepter to the second generation, with Zhang Zhengping serving as rotating president.

Boston Consulting conducted a statistics showing that among the top 100 family enterprises in China, a quarter of the founders are over 70 years old, and the average age of chairmen and CEOs still in office is over 60.

Gui Shengyue summed up this whole situation in one sentence: Most private enterprises are currently facing the problem of business succession. Li Shufu's resignation and An Conghui's taking over is a declaration of de-familization.

The de-familization he mentioned means that the family withdraws from the front line of operation, keeps the equity, and hands over the scepter to professional managers.

In May last year, the Private Economy Promotion Law came into effect, which clearly states that private enterprises are encouraged to establish a modern enterprise system. Geely's response to this requirement is perfectly in line with the policy orientation.

The market gave an immediate answer to the value of this declaration:

On October 28, 2022, Longfor founder Wu Yajun resigned, and Chen Xuping, who was brought up by her personally, took over the position.

After the resignation announcement was released, the market voted with their feet. On the opening day of Monday, Longfor's share price fell by 23.78%, and once dropped by 44% during the trading session, with a market value of nearly HK$20 billion evaporating in one day.

In the three years after taking over, Chen Xuping stuck to the bottom line of no default and no extension of debt, but in 2025, Longfor recorded its first core loss since listing, and its market value was cut by half compared with the period before the handover.