Work by the Woodcutter

People, Cars, the Jianghu: Witnessing the Rise of China's Automotive Industry Together

By chance, while perusing the 2025 bond annual report of Zhejiang Geely Holding Group Co., Ltd., I stumbled upon a staggering figure: the total non-recurring profit and loss for the reporting period stood at -14.401 billion yuan. The data is illustrated as follows:

My heart skipped a beat, shattering my preconceived notions, especially given Geely's historically robust financial standing. After meticulous verification, I confirmed the authenticity of the document.

A total non-recurring profit and loss of -14.401 billion yuan translates to a deficit of up to 14.4 billion yuan—a truly alarming level of loss.

It's important to note that Zhejiang Geely Holding Group is the parent company of Geely Automobile Holdings, and the data presented here are consolidated figures.

To delve deeper into the specific items contributing to this 14.4 billion yuan loss, I obtained the 2025 audit report for the entity.

Unfortunately, a detailed breakdown of the 14.4 billion yuan non-recurring profit and loss was not readily available. However, I did uncover another significant figure:

The 2025 financial report of Zhejiang Geely Holding Group reveals asset impairment losses as high as 14,676,456,523.67 yuan.

Yes, you read that correctly: Zhejiang Geely Holding Group's asset impairment losses amount to a staggering 14.676 billion yuan.

From an accounting standpoint, non-recurring profit and loss and asset impairment loss are not strictly synonymous. In the absence of a detailed breakdown of non-recurring profit and loss, I turned my attention to the breakdown of the 14.676 billion yuan in asset impairment losses:

As depicted in the figure, the main components of Zhejiang Geely Holding Group's asset impairment losses are as follows:

1. Inventory write-down losses of 880 million yuan;

2. Fixed asset impairment losses of 3.149 billion yuan;

3. Construction-in-progress impairment losses of 118 million yuan;

4. Development expenditure impairment losses of 103 million yuan;

5. Intangible asset impairment losses of 10.328 billion yuan;

6. Goodwill impairment losses of 59 million yuan;

7. Long-term equity investment impairment losses of 34 million yuan;

8. Other asset impairment losses of 2 million yuan.

Notably, the impairment loss of intangible assets stands out as the most significant, reaching a staggering 10.3 billion yuan. Without further information, it's impossible to pinpoint which intangible assets have depreciated so severely.

It's worth mentioning that in 2024, Zhejiang Geely Holding Group also recorded asset impairment losses of 7.672 billion yuan, with long-term equity investment impairment losses as high as 3.240 billion yuan.

In other words, in just two years, Zhejiang Geely Holding Group has incurred losses of 22.348 billion yuan through asset impairment.

With the exception of inventory write-down losses, the other losses are irreversible.

The item of asset impairment losses serves to assess the health of a company's assets and eliminate any inflated values. From an accounting perspective, it reflects prudence and prevents assets from being overvalued, ensuring that book values align with actual values.

However, from another vantage point, it also serves as an indicator of asset quality. If asset quality were high, there would be no need to recognize such substantial impairment losses. Therefore, when we observe Geely Holding Group recognizing such significant asset impairment losses, it prompts us to reflect on the quality of Zhejiang Geely Holding Group's assets.

As an investment platform, Zhejiang Geely Holding Group has invested in numerous projects. How is the quality of these projects? Have they yielded the expected results? Li Shufu, as the captain of Geely Holding Group, should be well-acquainted with the answers.

From the perspective of capital operation structure, Geely has undoubtedly demonstrated foresight. Many of its previous mergers and acquisitions were executed through Geely Holding Group, shielding the listed entity, Geely Automobile Holdings, from any adverse impact.

Admittedly, investments can succeed or fail, but regardless of the outcome, they demand substantial financial support. If the quality of the investment targets and assets is subpar, it may have a detrimental financial impact on investors.

For instance, Geely Holding Group's investment in Volvo emerged as one of the factors dragging down Geely Holding Group in 2025. This underscores the importance of exercising caution in investments.

Li Shufu, as the visionary leader of Geely Holding Group, faces the ongoing challenge of achieving high-quality development of Geely Holding Group's assets and breaking through the current impasse.

Disclaimer: The data presented above are sourced from publicly released documents and information by Geely Holding Group. Interested readers can follow BB Auto and reply with 'Geely Financial Report' in the background to obtain the 2023, 2024, and 2025 audit reports of Geely Holding Group.