A simple test can reveal whether a carmaker is truly exceptional: "Only in strong winds does tough grass stand firm." In other words, a quality automaker is one that continues to grow resiliently by advancing globalisation, premiumisation, and intelligence, even when the industry enters a phase of intense competition and faces multiple unfavourable disruptions. This is precisely what is reflected in the 2026 interim results and sales data released by GEELY AUTO (00175).

Half-Year Domestic Sales Champion with Simultaneous Growth in Volume, Price, and Profit

According to data from the China Association of Automobile Manufacturers, domestic passenger vehicle wholesale volume (including exports) reached 12.72 million units in the first half of 2026, a year-on-year decline of 6%, reflecting overall demand pressure in the industry. Despite external headwinds, GEELY AUTO achieved total sales of 1.423 million units in the first half, a year-on-year increase of 1%. Based on data from the China Passenger Car Association, the company ranked first in domestic passenger vehicle sales for the first half, and was the only carmaker to surpass one million units sold domestically during the period.

Notably, GEELY AUTO leveraged its 1% sales growth to drive a 15% year-on-year increase in revenue to RMB 173.6 billion, marking its sixth consecutive year of revenue growth. On the profit front, excluding exchange gains/losses and impairments on non-financial assets, core net profit attributable to shareholders reached RMB 9.684 billion, a substantial 46% year-on-year increase. In contrast, among the seven major vehicle manufacturers that recently disclosed interim earnings forecasts, two saw profits nearly halved and five fell into losses.

These contrasting figures highlight a shift in GEELY AUTO's growth model. While the industry widely adopts a "price-for-volume" approach, GEELY AUTO has carved out a path of "simultaneous growth in volume, price, and profit." In the first half, the company's overall gross sales margin improved to 17.9%, and average revenue per vehicle rose to RMB 112,000. On the cost side, administrative expenses edged up just 1% year-on-year to RMB 2.93 billion, but the administrative expense ratio fell 0.2 percentage points, reflecting the efficiency gains from business integration under the "One Geely" strategy. Meanwhile, despite a large-scale expansion of overseas channels, the selling expense ratio increased only 0.1 percentage points year-on-year, demonstrating the economies of scale from brand integration and channel reuse.

Improved operational efficiency amplified per-vehicle profitability. In the first half, core net profit per vehicle rose 45% year-on-year to RMB 6,806, driving net cash flow from operating activities to RMB 19.9 billion, up 32% year-on-year; period-end cash reserves reached RMB 69.6 billion. Based on this solid operational quality, GEELY AUTO has actively rewarded shareholders. During the first half, the company executed buybacks totalling HK$1.885 billion, and on July 30 implemented a dividend of HK$0.5 per share, a 51.5% year-on-year increase, with total dividends reaching HK$5.39 billion, maintaining a core profit payout ratio above 30% for five consecutive years.

In the secondary market, investors have continued to cast "votes of confidence" in GEELY AUTO. Since the start of 2026, 46 institutions have increased or initiated positions during the first half. Data shows that as of August 14, southbound capital held 1.207 billion shares of GEELY AUTO, representing an 11.12% stake. Recently, multiple domestic and international investment banks have issued positive ratings. Among them, CICC maintained an "Outperform" rating with a target price of HK$30, corresponding to 12.6x/10.1x 2026/2027 P/E, implying 60.7% upside.

'One Geely' System Enhancement: Four-Brand Synergy Strengthens the Foundation

The positive feedback from capital markets is essentially a pricing of the company's strategic integration capabilities and growth prospects. Leveraging the deep "One Geely" system integration, the four brands—Zeekr, Lynk & Co, Galaxy, and China Star—achieve differentiated synergy: each anchors a different price band and target customer base, enabling differentiated competition at the front end while sharing R&D, procurement, and supply chain resources at the back end, effectively avoiding the problems of duplicated investment and internal friction common in the new energy transition phase.

It is worth noting that Zeekr has grown into a profit pillar for GEELY AUTO. In the first half, Zeekr sold 178,400 units, accounting for only 12.5% of total sales, yet contributed 31.7% of revenue, with an average transaction price of approximately RMB 350,000. The Zeekr 9X continues to lead the domestic large SUV segment priced above RMB 500,000. In the second half, Zeekr will launch the Zeekr 9X Halo, which together with the 009 Halo will form a four-seat ultra-luxury dual flagship lineup. The Zeekr 9X will gradually enter overseas markets, marking the beginning of GEELY AUTO's premiumisation-driven global expansion. A research report from Northeast Securities suggests that as Zeekr completes privatisation and is consolidated into the listed entity, R&D and supply chain synergies are gradually materialising; with the high-end product matrix formed by the 9X and 8X, Zeekr is expected to gradually unlock its earnings potential.

Lynk & Co has broken away from homogeneous competition, championing the "trendy, sporty, individualistic" label. First-half sales reached 144,000 units, with the Lynk & Co 07GT serving as a transformative lever to open up high-end market segments; overseas, it collaborates with Volvo on European operations, leveraging mature channels to reduce the cost of trial and error in international expansion.

Geely Galaxy serves as the mainstream new energy cornerstone, with first-half sales approaching 520,000 units. Rather than pursuing a purely low-price, high-volume strategy domestically, Galaxy—exemplified by the Xingyuan—consolidates scale at home while overseas versions capture higher margins, forming a "domestic base for volume, overseas for profit" model. In the second half, the launch of two high-margin new models, TT and Zhanjian 700, alongside iterative updates to existing models, will continue to optimise the earnings structure.

The fuel vehicle business remains an important cash flow stabiliser for the company. GEELY AUTO's China Star series sold over 580,000 units in the first half, securing the title of China's best-selling domestic fuel passenger vehicle brand for the tenth consecutive year. Facing continued contraction in the domestic fuel vehicle market, the company is advancing i-HEV intelligent hybrid conversions, which have been applied to main models including Xingrui, Xingyue L, and Emgrand, with a year-end target of achieving monthly i-HEV sales of 30,000 units. Notably, this hybrid product line is planned to launch overseas in 2027; looking globally, fuel and hybrid vehicles still account for 60% of the market, and the overseas expansion of this technology system could open up entirely new growth space.

Industry-Symbiotic Global Expansion: Creating a New Growth Curve

Overseas markets have already become a powerful growth engine for GEELY AUTO. In the first half of 2026, overseas exports reached 474,200 units, a remarkable 158% year-on-year increase, with half-year export volume already exceeding the full-year figure for 2025. Monthly exports surpassed 100,000 units in both June and July, and the company's overseas sales ranking rose to third among domestic carmakers. Based on this better-than-expected performance, GEELY AUTO has raised its full-year overseas sales target from 640,000 units to 920,000 units, with an ambition to reach one million.

At the interim results briefing, the CEO of GEELY AUTO, Gan Jiayue, highlighted three key characteristics of the company's first-half exports: the fastest growth among mainstream carmakers, the fastest growth in new energy exports, and the fastest growth among Chinese premium brands. The company has established a long-term goal: two-thirds of future sales will come from overseas markets. It is worth noting that, unlike the asset-heavy plant construction approach commonly adopted by peers, GEELY AUTO has pioneered an "industry-symbiotic" export model: forming joint ventures and partnerships with local giants such as Ford, Renault, Proton, and Volvo, sharing their existing production capacity, supply chains, and channel resources.

The advantages of this model are significant: it enables rapid market penetration overseas while hedging against operational risks from geopolitical conflicts and changes in overseas policies, achieving smoother and more sustainable international expansion in an era of deglobalisation. The Ford Spain plant cooperation announced in July this year is a typical case. GEELY AUTO invested EUR 221 million to acquire a 34% stake in Ford's Valencia plant in Spain, forming a joint venture for contract vehicle manufacturing. According to Citi's research estimates, this joint-venture capacity model costs only 10%-20% of building a new greenfield overseas plant; it also directly leverages mature local supply chains, helping to hedge against potential EU import tariffs on electric vehicles. The transaction is expected to close in the fourth quarter and will mark a significant milestone in GEELY AUTO's European localisation efforts.

To date, GEELY AUTO operates 12 overseas manufacturing plants with total overseas production capacity exceeding 650,000 units, expected to surpass 840,000 by year-end. Its sales channels cover 114 core markets, with over 2,000 overseas physical outlets. R&D teams in Sweden and Germany have been integrated, reducing the time gap between global model launches and advancing the transition from "product export" to "systematic export."

High-Growth R&D Investment: Building a Leader in Full-Domain AI Intelligent Vehicles

The valuation logic for vehicle manufacturers in capital markets is undergoing profound change: pure sales volume is no longer the core pricing factor—proprietary technology reserves and full-chain intelligence capabilities are gradually becoming the key differentiators in valuation. GEELY AUTO positions itself as a "leader in full-domain AI intelligent vehicles," with its technology attributes extending beyond smart cockpit intelligence to embedding AI throughout the entire business chain—design, R&D, manufacturing, and after-sales. In the first half of 2026, GEELY AUTO invested approximately RMB 9.2 billion in R&D, a 25.5% year-on-year increase.

Through high-level R&D investment, the company has built a "1+2+N" full-domain intelligent agent technology framework: anchored by the WAM world behaviour model, supported by two pillars—the Super Eva intelligent agent and the Qianli Haohan G-ASD intelligent driving system—extending outward to multi-dimensional AI capabilities in safety, chassis, and energy. The company has deployed capabilities in chips, large models, embodied intelligent robots, and low-orbit satellites, building an integrated space-ground technology foundation, making it one of the few domestic vehicle manufacturers with full-stack proprietary R&D across multiple segments.

The three-electric system (battery, motor, electronic control) has completed vertical integration. Leveraging technology entities such as Haosi Power, Jiyao Mobility, and Xingchi Technology, GEELY AUTO has connected the complete chain from base materials to system integration. Proprietary technologies including i-HEV intelligent hybrid, Leishen AI hybrid 2.0, Shendun gold brick battery, and Leiting 16-in-1 intelligent electric drive have been deployed at scale in mass-produced models. In the second half, the company will release an upgraded version of the WAM world behaviour model, an upgraded Qianli Haohan intelligent driving system, and introduce an AI off-road architecture and all-terrain AI digital chassis. It has also established the "2030 Laboratory" targeting frontier areas such as power semiconductors, embodied intelligence, and large models, reserving disruptive technologies for the future.

From an investor's perspective, when a company's growth no longer relies on price competition but derives from product technology iteration, brand elevation, and global system output, the valuation framework should break free from traditional manufacturing PE constraints. GEELY AUTO's current valuation is at a historically relatively low level. As high-end models continue to ramp up and overseas capacity is gradually released, operating leverage and valuation recovery are expected to form a positive resonance.

Conclusion

Looking through this interim report card, GEELY AUTO has chosen to pursue an intrinsic, sustainable path of high-quality development. Relying on internal system integration, technological iteration, premiumisation breakthroughs, and global expansion, the company has delivered a distinctive answer: rejecting price competition and achieving value growth through system capabilities. During this deep industry adjustment cycle, the company balances scale with operational efficiency, serving as a typical example of domestic carmakers transitioning from scale expansion to value growth. Looking ahead, as the efficiency, technology, and brand dividends of the "One Geely" strategy continue to be released, GEELY AUTO is well-positioned to participate in global automotive competition with greater stability, providing practical reference for the upward trajectory of Chinese automotive brands.