Geely shares jump after automaker beats revenue expectations for 2022

Chinese automaker Geely beat revenue expectations for 2022, sending shares surging Wednesday.

Shares of Geely spiked as much as 7%, before settling down to trade nearly 3% above its previous close.

Geely reported its 2022 revenue surged 45.6% from a year ago to 148 billion yuan ($21.49 billion), while profit jumped 8.5% to reach 5.26 billion yuan. Analysts had expected Geely to report 135.4 billion yuan in revenue, according to a Refinitiv consensus estimate.

The company described this as a “resilient financial and operational performance… achieved despite challenging market conditions and continued pandemic-related disruption.”

Geely said total sales climbed 8% last year to over 1.4 million units. CEO Daniel Li told CNBC’s “Street Signs Asia” that this figure was higher than China’s 5% forecast for its overall auto industry.

The company said its high-end models accounted for 23% of total sales in 2022, or 252,787 units.

Geely said it made “significant progress” in increasing sales of its new energy and electrified models, as sales surged over 300% last year to more than 328,000 units.

For 2023, Geely set a sales target of 1.65 million units and said it aims to double the share of new energy and electrified vehicle sales.

In efforts to hit that target, Li said the company will lean on its collaborations in its supply chain, which will allow it to lower costs and subsequently selling prices.

“In the long term, no doubt, the EV [prices] will be on par with [internal combustion engine] cars,” he adds.

The company’s collaborators include Mercedes, Renault and Aramco in efforts ranging from the revival of the all-electric Smart brand to a new venture related to internal combustion and hybrid powertrain technologies.

Li said Geely and Renault aim to produce 7 billion engines and transmissions per year and are “open” to providing service and support to other brands transitioning from ICE to electric cars. He said Aramco will provide financial support, and that the two automakers will be able to “leverage on” new sustainable fuels from Aramco.