Geely Automobile: Profit Tripling and Strategic Reorganization Signal Undervalued EV Leader Ahead of Privatization

Geely Automobile’s recent profit surge—tripling in Q1 2025—reflects a masterclass in strategic reorganization, cost discipline, and geopolitical risk mitigation. While global automakers grapple with trade tensions and supply chain fragility, Geely has positioned itself as a leader in China’s EV revolution. This article argues that its structural efficiency gains, post-merger synergies, and shrewd domestic focus make its shares undervalued ahead of Zeekr’s privatization. Investors should act now to capitalize on this underappreciated opportunity.

Profit Tripling: The Alchemy of Scale, Cost Control, and Global Reach

Geely’s Q1 profit surge was no accident. It stemmed from three interlocking strategies:
1. Export Dominance: Record sales in overseas markets, where exports rose 57% year-on-year in 2024 to 414,522 units. .
2. Margin Expansion: Gross profit margins hit 15.9% in 2024, up 0.6 percentage points, driven by economies of scale and cost cuts in manufacturing and logistics.
3. Product Mix Shift: Aggressive launches of high-margin models like the Zeekr 9X (400km hybrid range) and Lynk & Co 900 (NVIDIA-powered SUV) targeted premium segments, boosting revenue.

Strategic Reorganization: Zeekr-Lynk Merger Unleashes Synergies

The 2025 merger of Zeekr and Lynk & Co into Zeekr Group was a stroke of genius. By eliminating redundancies in R&D, manufacturing, and distribution, Geely:
- Reduced overhead costs by 15–20%, according to internal estimates.
- Created a unified premium EV brand capable of competing globally with Tesla and Nio.
- Focused resources on cutting-edge tech, like Geely’s open battery safety patent pool and NVIDIA’s DRIVE AGX Thor platform (700 TOPS processing power).

The merger also streamlined Geely’s sprawling portfolio, ending internal competition between sub-brands. The result? A 46.9% revenue jump for Zeekr in 2024 to $10.4 billion, with net losses narrowing to $764 million—a 29.9% improvement.

Mitigating Geopolitical Risks: Domestic Focus and Supply Chain Resilience

Geely’s playbook for navigating trade wars and supply chain bottlenecks is clear:
1. Reduced Reliance on U.S. Markets: After Polestar’s strategic pivot to Europe (its core 75% revenue market), Geely avoided tariff-driven losses in the U.S.
2. Localized Supply Chains: By consolidating battery production and sourcing within China, Geely insulated itself from geopolitical disruptions.
3. Diversified Exports: While Latin American expansion was delayed due to tariffs, Europe and Southeast Asia became growth engines.

Valuation Case: Undervalued Shares Ahead of Privatization

Geely’s shares are mispriced relative to its strategic progress. The proposed privatization of Zeekr—offered at a 13.6% premium to its NYSE price—signals undervaluation:
- Zeekr’s $2.57/share offer reflects a $6.4 billion valuation, yet its 2024 revenue growth and margin improvements rival peers like Nio (€7.93 billion valuation).
- Post-privatization, Geely can allocate capital freely to high-margin EVs like the Zeekr 9X (targeting Q3 2025 launches) without public market pressures.

Conclusion: Act Now Before the Privatization Catalyst

Geely’s structural efficiency gains, synergies from its reorganization, and geopolitical risk mitigation have set the stage for sustained outperformance. With Zeekr’s privatization offering an immediate 13.6% premium and a clear path to long-term profitability, investors are being handed a rare opportunity. The data is clear: Geely’s shares are undervalued, and the privatization is the catalyst to unlock their true potential.

The question is not whether Geely will succeed in its EV ambitions—it already has. The question is whether investors will act before the market catches up.

Investors, take note: This is your moment.