Can Geely catch up quickly and shake BYD's dominant position?
Geely Auto released its Q4 2025 report during the mid - day trading session of the Hong Kong stock market at Beijing time on March 18, 2026. Specifically:
1. Revenue slightly exceeded market expectations: In this quarter, Geely Auto's total revenue reached 105.7 billion yuan, a year - on - year increase of 22%, slightly exceeding the market expectation of 104.3 billion yuan. This is mainly due to the increase in the average selling price (ASP) per vehicle brought about by the high - end product structure. The company has achieved good results in high - end development.
2. The revenue per vehicle continued to increase quarter - on - quarter due to high - end development: In this quarter, the revenue per vehicle was 124,000 yuan, an increase of 7,000 yuan compared with the previous quarter. This is mainly due to the explosive growth of the high - end ZEEKR brand:
In the fourth quarter, the sales volume of the ZEEKR brand increased by 52% quarter - on - quarter to 53,000 units, and its share in the total sales volume increased by 2.5 percentage points quarter - on - quarter to 9.4%.
The growth was mainly driven by the hot sales of high - end models such as the ZEEKR 9X priced at 465,900 - 599,900 yuan and the newly launched ZEEKR 001. Among them, the ZEEKR 9X achieved sales of 21,400 units in Q4, with an average price per vehicle as high as 538,000 yuan, which had a pulling effect on the overall ASP.
3. The gross profit margin also rebounded quarter - on - quarter: In the fourth quarter, Geely's overall gross profit margin was 16.9%, an increase of 0.9 percentage points quarter - on - quarter, mainly due to:
a. The volume increase and profit recovery of high - end models: The hot sales of high - gross - margin models such as the ZEEKR 9X (with an expected gross profit margin of over 40%), and the reduction of promotions for fuel - powered vehicles of the Lynk & Co brand led to a quarter - on - quarter recovery of the gross profit margin. The increasing volume of high - end models such as the Galaxy M9 also drove up the overall gross profit margin of the ZEEKR Group.
b. The release of scale effects: In the fourth quarter, the overall vehicle sales volume increased by 12.3% quarter - on - quarter to 854,000 units, diluting the fixed depreciation and amortization costs.
4. However, the significant increase in the three major expenses severely squeezed the operating profit: The core operating profit margin actually decreased quarter - on - quarter, mainly due to the significant increase in the three major expenses:
Although the revenue and gross profit improved, Geely's three major expenses (R & D, sales, and management) increased significantly quarter - on - quarter, and the core operating profit was significantly lower than expected.
Among them, the R & D expenses increased by 1.5 billion yuan quarter - on - quarter to 5.9 billion yuan, mainly used for the R & D of a new generation of high - end models (such as the ZEEKR 8X and subsequent flagships) and intelligent technologies (urban NOA, intelligent cockpit, chips). The increase in the R & D expense rate and one - time expense adjustments such as the integration of the intelligent driving team also had a negative impact.
The sales expenses also increased by 1.3 billion yuan quarter - on - quarter to 6.7 billion yuan, mainly used for the marketing of high - end brands (promoting the ZEEKR 9X) and the accelerated expansion of domestic and overseas channels (paving the way for the export target of 640,000 - 700,000 units in 2026).
With the huge investment in the three major expenses, the core operating profit decreased by 16% quarter - on - quarter to 2.84 billion yuan, significantly lower than the market expectation of 3.88 billion yuan. The core operating profit margin decreased by 0.9 percentage points quarter - on - quarter to 2.7%, and the core operating profit per vehicle decreased by 1,100 yuan quarter - on - quarter to 33,000 yuan.
5. The net profit attributable to the parent company barely met the market expectation thanks to the contribution of the share of joint - venture company earnings: Against the background of the squeezed operating profit, the net profit attributable to the parent company in the fourth quarter was 3.74 billion yuan, a slight year - on - year increase of 4%. The net profit per vehicle decreased from 5,000 yuan in the previous quarter to 4,400 yuan. The final net profit could barely meet the market expectation, mainly supported by the quarter - on - quarter increase of 520 million yuan in the share of joint - venture company earnings to about 780 million yuan.
Overall, from Geely's Q4 financial report, it can be seen that the high - end strategy has driven the revenue and gross profit margin to exceed expectations, but the significant increase in the three major expenses has severely eroded the current operating profit.
However, in terms of vehicle sales, Geely is still making steady progress. Although the management had previously raised the 2025 sales target (from 2.71 million units to 3 million units), Geely still achieved an annual sales volume of 3.02 million units in 2025, exceeding the sales target.
Regarding the most important acceleration of the new energy transformation: In the fourth quarter, Geely's new energy transformation continued to accelerate. The overall sales volume of new energy vehicles reached 520,000 units, a quarter - on - quarter increase of 17.4%. The new energy penetration rate increased from 58% in the third quarter to 61%, indicating that the company has entered the development stage dominated by new energy.
Breaking it down by brand:
a. Galaxy series: The sales volume of new energy vehicles increased by 29% quarter - on - quarter to 190,000 units, driven by new models such as the Galaxy M9, Xingyao 6, Galaxy A7, and Xingjian 7, which also verified the continued effectiveness of the Galaxy's "close - combat" strategy against BYD.
b. Lynk & Co brand: The new energy sales volume increased by 24% quarter - on - quarter to 79,000 units. The proportion of new energy models in the total sales volume of Lynk & Co reached as high as 72%, and the transformation was extremely rapid, mainly driven by the hot sales of models such as the Lynk & Co 10, Lynk & Co 08, and Lynk & Co 07.
c. ZEEKR brand: It led the growth with a quarter - on - quarter growth rate of 52% (53,000 units), mainly driven by the hot sales of the ZEEKR 9X and ZEEKR 001. The high - end development of the ZEEKR brand (especially the hot sales of the 9X) also drove the further increase of the average price per vehicle and the gross profit margin of vehicle sales.
Finally, ZEEKR's new energy vehicle sales volume in 2025 was 1.688 million units, a year - on - year increase of 90%, significantly exceeding the adjusted annual target of 1.5 million units in 2025 (113% completion rate).
Looking forward to 2026:
① Continuing the strong product cycle, overseas growth becomes the core increment
The company has set a total sales target of 3.45 million units in 2026, a year - on - year increase of 14%. The growth structure shows the characteristics of "dominated by new energy and strong overseas performance".
Among them, the sales volume of new energy vehicles is expected to reach 2.22 million units, a year - on - year increase of 32%. The new energy penetration rate will continue to increase by 8.5 percentage points year - on - year to 64%, while the sales target for fuel - powered vehicles is 1.23 million units, a year - on - year decrease of 8%.
From the perspective of each brand's plan, Geely will launch nearly 10 new models in 2026 to promote the achievement of the sales target:
Geely Galaxy: As the basic sales volume, the target sales volume of new energy vehicles is 1.52 million units, a year - on - year increase of 23%. It will consolidate the mainstream market with multiple new models such as the M7 and Xingyao 7.
ZEEKR: The target sales volume is 300,000 units, a year - on - year increase of 34%. The increment mainly comes from the continuous volume increase of the ZEEKR 8X, which has started pre - sales, and the ZEEKR 9X. It is the core of high - end development and profit growth.
The ZEEKR 8X will be launched in April, with advantages such as leading handling, luxury, and comfort. Moreover, the ZEEKR brand has actively adjusted its operation strategy, continuously improved its brand image, and further established itself in the high - end market. At the same time, as the integration effect gradually emerges, the high - end development of the ZEEKR brand will bring greater profit elasticity.
Lynk & Co: The target sales volume is 400,000 units, a year - on - year increase of 14%. The new energy transformation (the current penetration rate has exceeded 72%) and new models (such as the Lynk & Co 800) will jointly drive the growth.
② The overseas market will explode, contributing high profit elasticity:
In terms of regions, Geely expects its overseas sales volume to increase by 53% year - on - year in 2026 to about 640,000 units. From January to February 2026, it has achieved exports of 121,000 units (a year - on - year increase of 129%), and the corresponding annualized sales volume has reached 730,000 units. The achievement of the overseas sales target is highly likely.
The growth of overseas sales will continue to be driven by the export of new energy vehicles and the expansion of channels: The proportion of new energy in overseas sales is expected to rapidly increase to 45 - 50% (about 290,000 - 320,000 units), and the overseas channel network is planned to expand to more than 2,200.
The overseas market is the key to profit improvement: In 2025, the overseas ASP per vehicle (176,500 yuan) was 1.7 times that of the domestic market, and the gross profit margin was about 10 percentage points higher, with a net profit per vehicle of nearly 10,000 yuan. As the proportion of overseas sales increases to 18.6% in 2026, its high - profit characteristics will significantly drive the company's overall profit to recover.
③ The cost - reduction and efficiency - improvement effect after the integration of "One Geely" will be released:
After the privatization of ZEEKR was completed at the end of 2025, the "One Geely" strategy entered the full implementation stage, which is expected to bring substantial synergistic benefits in 2026.
The integration of R & D, procurement, manufacturing, and management platforms is expected to reduce the overall operating costs. As the integration and synergy effects are fully realized in 2026, the sales, management, and R & D expense ratios are expected to be controlled or reduced, thus alleviating the profit squeeze caused by the high - intensity investment in Q4 2025.
This article is from the WeChat official account "Dolphin Investment Research" (ID: haituntouyan). The author is Dolphin Jun. It is published by 36Kr with authorization.