Operating Margin - Geely Automobile Holdings Ltd (F:GRUA)

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Price: 41.2 EUR 3.52%

Market Cap: 20.7B EUR

5.4%

Current

Average

2.5%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

5.4%

Operating Profit

17B

Revenue

312B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
HK		Geely Automobile Holdings Ltd HKEX:175	184.2B HKD	5%
US		Tesla Inc NASDAQ:TSLA	1.5T USD	5%
JP		Toyota Motor Corp TSE:7203	43.7T JPY	9%
CN		BYD Co Ltd SZSE:002594	890.9B CNY	5%
DE		Mercedes Benz Group AG MIL:MBG	75.3B EUR	12%
US		General Motors Co NYSE:GM	75.6B USD	5%
DE		Daimler AG XETRA:DAI	67.5B EUR	12%
IT		Ferrari NV MIL:RACE	61.1B EUR	29%
DE		Bayerische Motoren Werke AG XETRA:BMW	58.7B EUR	7%
DE		Mercedes-Benz Group AG XETRA:MBG	54.8B EUR	5%
DE	V	Volkswagen AG XETRA:VOW	53.9B EUR	5%

Geely Automobile Holdings Ltd
Glance View

Economic Moat

Narrow

Market Cap

20.7B EUR

Industry

Automobiles

In the bustling heart of China's industrial landscape, Geely Automobile Holdings Ltd. has carved a niche for itself, rising from a humble refrigerator parts manufacturer to one of the most prominent automotive giants. Founded by the entrepreneurial visionary, Li Shufu, in 1986, Geely's progress reflects the dynamic transformation of this billion-dollar industry. The company initially ventured into motorcycle production before making the definitive leap into the automotive sector in the late 1990s. Geely's flexibility and strategic acumen enabled it to adapt to the rapid evolution of consumer demands and regulatory landscapes, steering it onto a path of success. Central to its operations is a robust network of research and development facilities, focused primarily on sustainable automotive technologies and innovation in electric vehicles—a nod to the changing tides favoring environmental sustainability. Geely thrives by harnessing a synergistic model that merges domestic prowess with global ambition. Its acquisition of Volvo Cars in 2010 marked a turning point, bolstering Geely's reputation on the international stage and enhancing its technological capabilities. The company primarily generates revenue through the design, manufacturing, and sale of automobiles, underpinned by a diverse portfolio that includes sedans, SUVs, and new energy vehicles (NEVs). By leveraging strategic partnerships and investments, such as with Daimler AG, Geely is adept at integrating advanced tech into its vehicles, appealing to tech-savvy consumers. Through this expansive ecosystem, it can benefit from economies of scale and maintain competitive pricing while reinvesting in future growth areas like autonomous driving technology, thus ensuring its ongoing relevance in the highly competitive global automotive market.

View GRUA Analysis

GRUA Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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Geely Automobile Holdings Ltd
F:GRUA