On September 2024, Li Shufu, the Chairman of Geely Holding, released the "Taizhou Declaration," announcing that the company's strategic transformation had entered a new phase. Since then, Geely's various business segments have accelerated their integration, now reaching the most core areas of their operations.
On November 14, as a key measure to implement the strategic framework of the "Taizhou Declaration," Geely Holding announced an optimization of the equity structure of Zeekr and Lynk & Co. The goal is to clarify equity relationships, reduce related-party transactions, eliminate competition among peers, and firmly promote the deep integration and efficient collaboration of internal resources.
Reports indicate that Geely Holding will transfer its 11.3% stake in Zeekr Intelligent Technology (hereinafter referred to as "Zeekr," stock code: NYSE: ZK) to Geely Automobile Holdings Limited (hereinafter referred to as "Geely Automobile," stock code: 0175.HK). Upon completion of the transaction, Geely Automobile's shareholding in Zeekr will increase to approximately 62.8%.
At the same time, the equity structure of Lynk & Co (hereinafter referred to as "Lynk") will also be optimized to promote a comprehensive strategic synergy between Zeekr and Lynk. Zeekr will hold a 51% stake in Lynk, with the remaining 49% owned by a wholly-owned subsidiary of Geely Automobile.
GEELY Geely Automobile
Geely Holding consistently adheres to the principles of transparency and compliance in corporate governance, enhancing capital structure optimization, resource cooperation, and efficiency improvements to empower sustainable development for each brand. Each brand maintains a distinct and clear brand positioning, differentiated technology planning, and product portfolio.
Specifically, Zeekr is positioned as a global luxury tech brand, characterized by a brand tone of "luxury, extremity, technology," catering to the high-end luxury market; Lynk is positioned as a global mid-to-high-end new energy brand, with a brand tone of "trendy, sporty, individuality," covering the mid-to-high-end market; while Geely Galaxy and China Star are positioned as mainstream brands with a brand tone of "practicality, quality, safety," targeting the mainstream market.
By clarifying equity relationships, each brand can continue to seek collaborative development while expanding their shares in segmented markets. Zeekr and Lynk will strengthen their collaboration in technology, products, supply chain, manufacturing, marketing and services, and international market expansion, thereby improving technological innovation capabilities, stimulating economies of scale, and striving to establish Zeekr and Lynk as a globally leading high-end luxury electric vehicle group with an annual output of one million units by the end of 2026.
In fact, as a starting point for integration, Geely officially announced the merger of the Geometry brand into the Galaxy series on October 9 of this year.
The success of the integration of Zeekr and Lynk is crucial for the future of Geely Holding, as these brands represent Geely's transformation toward electrification and high-end offerings. In the first three quarters of this year, the sales of Lynk and Zeekr accounted for nearly 30% of Geely Group's total sales.
Founded in 2017, Lynk achieved one million sales within six years, becoming a representative of domestic performance cars. This year, it also launched its first all-electric car, the Lynk Z10, which will be followed by the second electric vehicle, the Z20, at the Guangzhou Auto Show. Zeekr debuted its first model, the Zeekr 001, in 2021, reaching sales of 100,000 units in just over 500 days and successfully listing on the New York Stock Exchange within three years.
Industry analysts note that both brands have achieved certain successes in their respective fields but also face issues of market overlap and product competition. This not only impacts their individual market performances but also hinders Geely's overall market expansion. By streamlining equity relationships and clarifying brand positioning, internal competition can be resolved, resource allocation optimized, redundant investments reduced, and Geely's competitiveness in the electric vehicle industry enhanced.
As the global automotive industry undergoes electrification, competition among companies has intensified, especially in the Chinese market. Reducing internal friction, concentrating resources, improving operational efficiency, and enhancing market competitiveness have become imperative.
Li Shufu stated that to stand out in a fiercely competitive market environment, Geely Holding released the "Taizhou Declaration" in September of this year, announcing the company's entry into a new phase of strategic transformation. This strategic integration is a key measure to implement the declaration, which will have a profound impact on the synergistic development of each brand, enhancing innovation capabilities, profitability, and sustainable growth, thereby creating greater value for a wide array of users and investors.
Geely Automobile Holdings Limited (0175.HK) simultaneously released its third-quarter financial report for 2024, indicating that its sales reached a record high of 534,000 units in the third quarter, a year-on-year increase of 18.7%. Third-quarter revenue hit a record high of 60.4 billion yuan, up 20.5% year-on-year. Benefiting from economies of scale and improved operational efficiency, the core profit attributable to shareholders reached 2.76 billion yuan in the third quarter, representing a year-on-year increase of 116%, further enhancing profitability.
