Geely Holding Group, which has entered a new stage of strategic transformation, has taken another crucial step.
On November 14th, Geely Holding announced the optimization of the equity structure of Jike and Lynk&Co, and will transfer 11.3% of its shares in Jike Intelligent Technology (hereinafter referred to as "Jike", stock code: ZK) to Geely Automobile Holdings Limited (hereinafter referred to as "Geely Automobile", stock code: 0175. HK). After the transaction is completed, Geely Automobile's shareholding in Jike will increase to approximately 62.8%. At the same time, the equity structure of Lynk&Co (hereinafter referred to as "Lynk&Co") has been optimized to promote comprehensive strategic synergy between Jike and Lynk&Co. Jike will hold 51% of Lynk&Co's shares, while the remaining 49% of Lynk&Co's shares will continue to be held by a wholly-owned subsidiary of Geely Automobile.
This is a crucial measure for Geely Holding to implement the strategic framework of the Taizhou Declaration. In September of this year, Geely Holding Group (hereinafter referred to as "Geely Holding") issued the "Taizhou Declaration", announcing that the company has entered a new stage of strategic transformation. The group will focus on the automotive industry, layout the technology ecosystem, enhance competitiveness, strive for progress while maintaining stability, and promote sustainable development of the enterprise through five major measures: strategic focus, strategic integration, strategic synergy, strategic stability, and strategic talent.
At present, the wave of intelligent electrification is sweeping across the entire automotive industry, and the traditional automotive circle is being deeply deconstructed and reshaped. New players in the technology industry are entering the market, and traditional car manufacturers are carrying out self innovation. The transformation of the automotive industry is gradually entering the deep water zone. In the fiercely competitive new energy vehicle market, efficiency, cost, research and development, system strength, and the ability to vertically integrate the industrial chain have become the core competitiveness for various players to compete for the future.
Li Shufu, Chairman of Geely Holding, stated that in order to stand out in the fiercely competitive market environment, Geely Holding issued the "Taizhou Declaration" in September this year, announcing that the company has entered a new stage of strategic transformation. This strategic integration is a key measure to implement the declaration, which will have a profound impact on the coordinated development of various brands, improve innovation capabilities, profitability, and sustainable development momentum, and thus form a stable operating situation, creating greater value for users and investors.
Jike and Lynk&Co engage in comprehensive strategic synergy
On November 14th, Geely Holding announced the optimization of the equity structure of Jike and Lynk&Co, and after the adjustment, Geely Automobile's shareholding in Jike will increase to about 62.8%. Jike will hold 51% of Lynk&Co's shares, while the remaining 49% of Lynk&Co's shares will continue to be held by a wholly-owned subsidiary of Geely Automobile.
Volvo Cars also announced on the same day that it would sell its 30% stake in Lynk&Co to Jike Motors, with an expected transaction amount of 5.4 billion yuan (8 billion Swedish kronor). The transaction will be paid in cash, with 70% to be paid at delivery and the remaining 30% and interest to be paid within one year after completion. The related transaction is expected to be completed in the first quarter of 2025. The transaction requires approval from the Volvo Cars special shareholder meeting expected to be held in the first quarter of 2025, as well as approval from other regulatory agencies. Volvo Cars has been one of the shareholders of Lynk&Co since its establishment in 2017. This stock adjustment is related to Lynk& The future development of Co is related to the optimization of the company's equity structure. Volvo Cars will continue to focus on operational cooperation with Lynk&Co in overseas markets, achieving strategic win-win outcomes for both parties.
Under the trend of smart electronics, both Jike and Lynk&Co have achieved good market performance.
Jike was established in March 2021 and released the Jike brand and its first product in April of the same year. It is positioned as a luxury technology brand and has launched six models for sale. On May 10, 2024, Jike was successfully listed on the New York Stock Exchange with the stock code "ZK", marking a new milestone in the company's global development. Only 37 months after its establishment, Jike has broken the record for the fastest time from launch to IPO listing for a new energy vehicle brand.
In October 2024, Jike delivered 25049 units, setting a new historical high with a year-on-year increase of 92% and a month on month increase of 17%. It remained a club with monthly sales of over 20000 yuan, and the average transaction price of bicycles reached 300000 yuan, ranking among the top luxury brands. From January to October this year, Jike delivered a total of 167922 units, a year-on-year increase of 82%. As of the end of October, Jike has delivered over 360000 units, continuously breaking delivery records.
At the end of October 2024, the map free city NZP of Haohan Intelligent Driving 2.0 will be launched in batches nationwide two months in advance. By the end of this year, the Jike 001, 007, 7X, and MIX equipped with Haohan Intelligent Driving 2.0 will achieve the "national, full quantity, and full model" promotion of the map free city NZP, truly achieving the goal of "driving nationwide and on the road". As of the end of October 2024, Jike has entered more than 40 countries and regions, continuing to expand in global markets such as the Middle East, Southeast Asia, Australia, Latin America, and Africa.
Lynk&Co creates high-value products and services for users through global design, global technology, global manufacturing, and global sales, bringing a brand new driving experience that goes beyond cars. From January to October 2024, the total sales of Lynk&Co reached 226677 units, a year-on-year increase of nearly 38%. Among them, the Lynk&Co 07 and Lynk&Co 08 EM-P twin stars have sold over 10000 units for five consecutive months, becoming a driving force for Lynk&Co's car sales growth. In October, the sales of the Lynk&Co EM-P family reached 16937 units, with a historical total of nearly 230000 units. As a representative of high-end and high-performance Thor EM super hybrid technology, the Lynk&Co EM-P truly achieves electrification, hybridization, and range extension with the world's first 3-speed DHT configuration, high thermal efficiency hybrid dedicated engine, and intelligent control as its core. As a global mid to high end brand in new energy, Lynk&Co has become a new paradigm for Chinese automotive brands to rise by creating diversified products and providing high-quality services, with an average transaction price of over 170000 yuan for brand models.
After the equity structure adjustment, Jike is positioned as a global luxury technology brand, covering the high-end luxury market and focusing on "luxury, ultimate, and technology"; Lynk&Co is positioned as a global new energy mid to high end brand, covering the mid to high end market, with a focus on "trend, sports, and personality". Jike and Lynk&Co will have clearer brand differentiation, creating unique value experiences for their respective user groups. They will maintain independence in front-end businesses such as marketing, business models, and user operations. At the same time, the two brands can strengthen collaboration in technology, products, supply chain, manufacturing, marketing and services, international market expansion, and other aspects, forming a joint force, thereby improving technological innovation strength, stimulating economies of scale, enhancing competitiveness and profitability.
At the Geely Automobile (0175. HK) 2024 Q3 performance exchange meeting held on November 14th, Li Donghui, CEO of Geely Holding Group, stated that Geely Holding fully supports the needs of Geely Automobile and will further consolidate its position as the core base of Geely Holding's automotive industry. Through this strategic adjustment, Geely Holding's internal equity and management structure have become clearer. In the future, as the major shareholder of Geely Automobile and Volvo, Geely Holding will continue to firmly implement the Taizhou Declaration, further strengthen internal collaboration, and promote deep integration and efficient integration of internal resources.
Geely Holding enters a new stage of strategic transformation
The integration of Jike and Lynk&Co is a key measure for Geely to implement the strategic framework of the Taizhou Declaration. Behind this move is Geely Holding's strategic consideration of strengthening capital structure optimization, resource coordination, efficiency improvement, and empowering sustainable development of various brands.
In September of this year, Geely Holding Group officially released the "Taizhou Declaration", announcing that the company has entered a new stage of strategic transformation. It explicitly stated that the group will focus on the automotive industry, layout the technology ecosystem, and enhance competitiveness through five measures: "strategic focus, strategic integration, strategic synergy, strategic stability, and strategic talent". The Taizhou Declaration is a development consensus reached by Geely Holding Group after strategic review of the new global economic situation and industry competition pattern. It is a strategic transformation measure that is in line with Geely's actual situation, hoping to elevate Geely's competitiveness and combat effectiveness to a new stage.
After the announcement, Geely's focused action has already begun. On October 9th, at the Geely Xingyuan IPO press conference, Gan Jiayue, CEO of Geely Automobile Group, said, "Geely New Energy will focus on building the Galaxy brand, officially integrating Geometry into the Galaxy brand, and 'GEOME' will become the intelligent boutique car series of Galaxy
In addition, with the integration of Jike and Lynk&Co, Geely's various brands will further form unique and clear brand positioning, differentiated technology planning, and product combinations. Extreme Krypton covers the high-end luxury market; Lynk&Co covers the mid to high end market; Geely Galaxy and China Star are positioned as mainstream brands, covering the mainstream market with a brand tone of "practicality, quality, and safety". After Geely Automobile Holding Co., Ltd. (0175) increased its capital to Jike, it has absolute control over Jike and the bond in terms of equity structure has become closer. Geely, Lynk&Co, and Jike, while expanding their segmented market share, will closely collaborate to strengthen profitability, form core competitiveness, and sustainable development capabilities. Geely is committed to building Jike and Lynk&Co into a globally leading high-end luxury new energy vehicle group with annual production and sales of millions by the end of 2026.
The century old automotive industry is constantly evolving, and enterprises do not have a fixed strategy. They must constantly adjust their strategies in response to the times. Geely Automobile Holdings Limited CEO Gui Shengyue also stated at the 2024 Q3 earnings conference that Geely Automobile has always taken it as its responsibility to create maximum value for shareholders and adheres to the principle of putting shareholder interests first. This strategic integration is not only imperative based on market strategy considerations, but also the best opportunity for small shareholders of Geely Automobile.
Looking back at the past development history of Geely Holding, the equity structure of its various brands was formed based on the industry background at that time and continuously adjusted with the development of the enterprise and industry. For example, after Geely Holding Group acquired Volvo Cars, in order to strengthen collaboration, the Lynk&Co brand was created, which also led to the joint shareholding of Geely Holding Group, Geely Automobile Holding Co., Ltd., and Volvo Cars. Jike is a bold attempt by Geely Holding in the transformation towards intelligent electrification, adopting a new business model and achieving US stock listing in just three years. In addition, Geely Galaxy has gained advantages in the transformation towards intelligent electrification. In the future, the three major brands will achieve breakthroughs in products and lead in technology, forming core competitiveness and sustainable development capabilities.