Geely Automobile Holdings Limited

Mr. Gui Shen Yue, CEO and Executive Director of GD Automotive Holdings Limited. Mr. Gan Jia Yue, CEO of GD Auto Group, Executive Director of GD Automotive Holdings Limited. And Mr. Dai Yong, CFO of GD Auto Group. Also, we have invited with us Madam Zhang Jing Ying, now Independent Director, to be with us over this conference. So I think the hot spell of Hangzhou happens to be coinciding with the booming market in China. So today we have three sections for today's brief conference. First of all, we will hand over to Mr. Dai for a brief interview followed by Mr. Gui's opening speech and further followed by the Q&A session. Apart from our offline audience, you are all the more welcome to type in your questions through the online channels. So over to you, Mr. Dai, for some introductions. Okay. Thank you very much for your introduction. Mr. Moderator, dear investors, and friends from the media, good afternoon. My name is Dai Yong. It is my pleasure to present the GD Automotive results for the first half of 2025. During the first half of this year, GD Automotive continued its strong momentum growth, recording all-round increases in sales volume, market share, revenue, and core profit. Sales volume-wise, we delivered about 1.409 million units in the first six months, up by 47% year-on-year, far outpacing the industrial average of 13%. In terms of market share, for the first time ever, we exceeded 10%, reaching 10.4%, an increase of about 2.4 percentage points year-on-year. In terms of revenue, our sales revenue amounted to about RM150.3 billion, up by 27%, maintaining steady and sustained growth. The core net profit attributable to the parent company reached about RM6.66 billion, up by 102% year-on-year, achieving a double-digit growth rate of our profit. Now let me come to the brief introduction of the details. In terms of the sales performance, actually I've already told you that we delivered about 1.409 million units in the first half, a new historical high. Both ICE and NEV vehicles achieved parallel growth and continuously consolidating our market base. In terms of ICE market, 684,000 units in the first half were sold, an 8% increase year-on-year. And in terms of NEV, about 725,000 units were sold, another record high, representing an area of about 126%, far exceeding the industrial average. And the Galaxy brand has achieved its new explosive growth, recording about 548,000 units, up by 232%. NEV penetration rate increased about 51.5% for the first half of this year, with domestic NEV penetration rising to 55.9% above the industrial average. In terms of exports, the total export volume was about 184,000 units, down by 8% year-on-year. Despite its performance still, we have maintained outstanding performances of our NEV exports, reaching about 40,000 units, up by 146%. We are of the belief that in the days to come, EV exports will continue to become an important driver of a future growth for EGD Group. The rapid growth of EGD has actually been the strong boost behind both revenue and the gross profit to new highs. The total revenue exceeded about RM150 billion, up by 27%, of which vehicle revenue was about RM134.6 billion, up by 28%. Gross profit totalled RM24.7 billion, up by 24% in terms of gross margin. Despite increasingly fierce competition in China, the gross margin remained stable for the first half of this year. at about 16.4%. Despite the slight 0.3 percentage point decline compared with 16.7% in the first period of this year, that decline was mainly because of the uneven growth rates of products within different gross margin profiles. In terms of the skill effects, the selling expense ratio and the selling and administrative expense ratios declined markedly. In terms of the selling expense ratio, it fell to about 5.6%, down by 16% year-on-year, and the administrative expense ratio dropped to about 1.9%, down by 26%. In terms of R&D, the total investment for the first half of this year was RMB 8.3 billion, down by 8.6%. The R&D ratio declined from 7.7% to 5.6%, a drop by 28 percentage points, demonstrating rapid gains in R&D efficiency. The absolute decline in R&D spending reflects the increasingly deficient use of the resources and product portfolios. In terms of profitability, In a general perspective, the strong sales growth and improved product profitability drove core net profit attributable to the parent to 6.66 billion RMBY, up by 102 percentage points. Why oh why? Because of that huge boost. So we benefit a lot from the per unit profitability enabled by a rapid increase in the core net profit margin. Especially for the NEV sales sector, The core net profit per unit rose to roughly 4,700 RMB yuan, up by 37 percentage points year-on-year. The core net profit margin expanded from 2.8% to 4.4%, an increase of about 57%, leading the industrial average. The profit growth has also provided abundant cash flows and reserves to the whole company. The total cash flow reached 58.8 billion RMB yuan hitting another record high the net cash also stood at a high volume and the operating activities contributed about 15 billion yuan in net cash flow during the first half and the ongoing optimization of operations continues to supply the group with substantial liquidity now let me come to different groups under our GD automotive company in terms of GD galaxy The sales volume reached 548,000 units, up by 232 percentage points a year, with market share about 8.4%, firmly placing the brand in the top tier of China's NEV market. of Geely maintained the top position across all passenger vehicle segments in China. Xinyao 8, which was launched on May 9th, became the best-selling plug-in hybrid B segment sedan across all brands. The domestic sales of Geely China Star ICE models reached 474,000 units up by 21% year-on-year, marking the ninth consecutive year as China's top-selling China brand ICE passenger vehicle series. The China Star continues to lead with counter-cyclical growth, raising its market share to 8.7%, up by 1.6 percentage points. There are a lot of notable performances, including Xin Yue L remains the best-selling ICE SUV across all segments, Bing Yue is the best-selling China brand A0 segment ICE SUV. First half of this year, the Zika and the Lincoln Co. brands completed a strategic integration with synergies already coming to its shore. For example, Zika, we sold about 91,000 units up by three percentage points year on year. Zika produced products cover key premium segments and the brand continues to rank among the top Chinese new energy premium marks. The 007 GT Shooting Brake achieved 10,000 units produced and delivered within its first month, become the ideal first premium shooting brake for young customers to date at about 300,000. Zika Shooting Brake Models has rolled off the line. Lincoln Co. 154,000 units were sold up by 22 percentage points. Cumulative deliveries also surpassed 1.5 million units. Since the launch on April 28th, the Lincoln Co. 900 has ranked among the top three full-size hybrid SUV vehicles in its segment. Also during this half year, Genie's globalization has also taken a quickening pace of acceleration. As evidenced by the following few aspects, first of all in terms of sales, NEV exports gained speed and prospered well in multiple markets, in which NEV export volume exceeded 40,000 units, up by 146%. The GD-EX5 and the EMA-S7 together exported more than 22,000 units, leading the pure electric market in Malaysia and a compact SUV segment in Costa Rica. Zika 009 leads the MPV segment in Hong Kong of China and a luxury pure electric MPV segment in Thailand and Malaysia. Also, we have seen the rollout of a lot of new products. The GD brand has entered about 85 overseas markets with more than 1035 sales outlets and service positions. Zika demonstrated strong competitiveness in global premium and EV markets, winning the premium brand sales crown or championship in Hong Kong, China, and pure electric brand crown in Kazakhstan. Lincoln Co expanded its global footprint. For example, in Europe, we have a European dealer network reaching about 58 yacht leaders and 08 EMP officially entered the European market in June. We have a lot of overseas international partnerships cementing its collaboration. For example, Proton sold about 77,000 units in the first half of this year. The pure electric SUV E-MAS7 exceeded 4,000 units and became Malaysia's best-selling EV. Renault Korea has sold about 47,000. The Renault Grand Collier SUV reached 26,000 units and ranking up on the top three hybrid SUVs in Korea. In terms of technological distribution in the field of AI, we not only possess industrial leading computing power, large models and big data, but also deliver their concrete and impressive AI applications in all fields. For example, assisted driving system, we unified our systems under the name Qianli Haohan, with solutions ranging from H1 to H9 deployed. across different models to demonstrate the safety. In terms of smart cockpit, the next generation Flyme Auto will be launched during the next half of this year. The Galaxy M9 will be the first model to feature an end-to-end AI voice large model, delivering human-like emotional voice and interaction. Also, over WAIC 2025, the smart egg cabin equipped with the preview version of Agent OS stood out among more than 3,000 exhibits and was awarded conference's top honor of treasurer of the pavilion. We use AI to improve our powertrain system. The new generation Thor EMI AI hybrid system has reached an industrial leading engine thermal efficiency of 47.26%. The AI digital chassis delivers all-round improvements in safety, handling and comfort. In the area of SG, Gini has always practiced long-term sustainable growth mentality. By the end of June 2025, the critical degree of full life cycle CO2 emissions per vehicle has fallen by 23.5% compared with 2020 standard, further advancing towards the year-end target of 25%. we actually perform quite comfortably well compared with some other competitors in this regard. And based upon this above-mentioned few aspects, we have uplifted the sales volume to a new high. From January to July, the cumulative delivery reached about 1.647 million units representing 54.7% of the A new target, in the second half, we will fully deploy across product launches, technological innovation and overseas expansion to ensure the new target. We hope to launch four all-new NEV models and another four are scheduled for launch. GDA Galaxy will introduce the mainstream plug-in hybrid sedan Galaxy A7 in August. The first model to feature the Thor EMI 2.0 AI hybrid system and the Qianli Haohai H3 assisted driving system. In the third quarter, the flagship plug-in hybrid SUV Galaxy M9 equipped with H5 and multiple new AI technologies will be coming to the foreground. The compact plug-in hybrid sedan Galaxy XIN YAO 6 will also follow. in the fourth quarter. Geely China Star will launch the fifth-generation M Grand in the second half. The refreshed versions of Xin Yue L, the Xin Rui and Bo Yue will be rolled out successfully. The China Star brand will also comprehensively upgrade its mainstream ICE products with full intelligence to deliver high-quality, high-intelligence ICE vehicles, with the Zika 9X in the next second half will be also introduced.

The co-models will also receive updates with improvements in assisted driving and electric drive system. For Lincoln Co., they will launch the Lincoln Co. 10 EMP in the third quarter, the first model to feature the new generation. Talking about experts, in the second half of this year, the GD brand will enter Brazil, the United Kingdom, Italy, Poland, South Africa, and a lot more overseas markets. For Zeker, it will enter Switzerland, Denmark, and Belgium market. The Lincoln Co. brand will further expand the dealer network into the Czech Republic, Austria, and Switzerland market. In external cooperation, the company will establish a joint venture with Renaud in Brazil under an asset-light model, leveraging Renaud's local production capacity and sales channels to enable rapid market entry. Looking forward in the face of even more complicated scenarios in 2025, the corporate management with unwavering strategic results and forward-looking visions fully leverage the competitive advantage of systematic synergy, accelerating the deep integration of AI technology with advanced manufacturing and strive to become a technology company with formidable intelligent manufacturing capabilities. That concludes my presentation. Thank you very much. Thank you, Mr. Dai, for your wonderful presentation. Next, I would like to invite Mr. Gui to address the audience. I would like to offer my gratitude to all the audience, both offline and online, for your long-term interest in GD Auto. I would like to give you a bit of explanation. On May the 15th, we launched a quarterly report release and on May the 7th an acquisition bidding was also offered so the May 15th conference was held not only for the release of the quarterly business performance but also a venue where we can give you the explanation of our business strategies in the future Mr. Li Donghui and other senior executives were present at the May 15th conference. Because of the mergers, an acquisition has not been completed legally. So our MC still stick to the original job titles when introducing the attendees of today's press conference. So this is a bit of the explanations of our job titles. It doesn't mean that we have incurred any other changes after the May 15th conference. As to our first half of 2025 business performance of GD Auto there are a couple of highlights I would like to share with you first of all we efficiently resolutely implemented the title declaration from the end of last year to the beginning of this year once we complete the mergers between Lincoln Co and Zika as the synergy improves after the mergers we found that the co-existence of the two public companies will continue to serve as a hindrance to in-depth integration and the co-existence of the two publicly listed companies will still incur some duplicated investment. So that's why we made a strategic decision to turn this two listed company into one listed company. As I just said, we resolutely implemented the title declaration in the past couple of months. we've made notable achievements and we've made smooth and efficient progress so far. On May 17th, we issued an offer for acquisition and the contract was signed subsequently, you're probably interested in the exact date on the closing of the deal. If on May the 17th, May the September shareholders assembly and Gili Auto's shareholders assembly all give a green light to this acquisition deal, I think the case will be closed successfully legal-wise and the transaction will be completed by the end of this year. This grand mergers between the two listed company is deemed as the first highlight for Geely Auto in the first half of 2025. I would like to say that this mergers between the two publicly listed companies is of strategic importance to Geely in the future. Given the current auto market situation in China, the big merge will ensure the future business success of Geely as a whole. Based on the financial results we just released, I'll give you a brief recap of our financial performance in the first half of 2025. As to sales performance, the PPT shows we completed about 1.409 million units, which is a record high for half year sales performance. This 1.5 million is just a number. What really matters is everything behind this number. Most importantly, I think you just catch this message from our PPT, that across different segments, the whole spectrum of the segments in the market, our market share, for the first time in history, exceeded a double digit, reaching 10.4% of the total market. Geely currently ranks number two in China in terms of its sales volume. And the number one auto brand in China accounts for 14.77% of the market share. So we're still four percentage behind the number one auto brand in China. So last year the difference is eight percentage points. So after six months of development, yes, we still ranked number two in terms of market share. Yeah, the differences between number one and number two decreased by 50%. If we take a look at the breakdowns of this number, we found that And Geely ICE is the most intelligent and the most fuel efficient models among all the Chinese brands, auto brands. I think in the future Geely will continue to hold its number one position in the ICE market in China. Now let's turn to new energy vehicle market. Right now our market share is for 4%. So what does it mean? Yes, Geely NEV market share allows Geely ranks number two in China. And number one's market share is 21.8%. So there is still significant difference between number one and number two in terms of market share. So if you take out the overall market spectrum, the difference is only a fourth percentage point.

But in new energy vehicle market share, there is still a...