Company Reports

Li Auto’s first-quarter revenue was in line with Refinitiv consensus, but net profit missed expectations. Vehicle margin of 19% staged a small year-over-year decline due to the negative impact of price promotions despite a larger delivery volume. Vehicle delivery guidance also missed market expectations, with disappointing sales of the Mega, the firm's first pure battery electric vehicle, or BEV. We cut our 2023-26 revenue and profit estimates to reflect lower volume and margin assumptions. We reduce our fair value estimate to USD 37.50 per ADS (HKD 147.40 per share) from USD 51.00 (HKD 198.20), which implies a forward 2024 price/sales ratio of 2 times and price/earnings of 42 times.

Li Auto is a leading new energy vehicle, or NEV, manufacturer in China, producing plug-in hybrid electric sport utility vehicles, or SUVs, for family car use. Li Auto put a lot of effort into its range-extension powertrain, which has become a key selling point for its value-for-money vehicles. As it uses less battery, plug-in hybrid electric vehicles, or PHEVs, offer significant price advantages compared with battery electric vehicles, or BEVs.

Li Auto reported fourth-quarter revenue 6% ahead of the high end of its guidance. Vehicle margin of 23% staged an upward trend sequentially, with adjustments of warranty reserve and economies of scale offsetting the impact of price promotions. Vehicle delivery guidance was also better than market expectations. We increase our fair value estimate to USD 51.00 per ADS (HKD 198.20 per share) from USD 39.10 per ADS (HKD 151.90 per share), which implies a forward 2024 price/sales ratio of 2 times and price/earnings of 33 times.

Li Auto is a leading new energy vehicle, or NEV, manufacturer in China, producing plug-in hybrid electric sport utility vehicles, or SUVs, for family car use. Li Auto put a lot of effort into its range-extension powertrain, which has become a key selling point for its value-for-money vehicles. As it uses less battery, plug-in hybrid electric vehicles, or PHEVs, offer significant price advantages compared with battery electric vehicles, or BEVs.

Li Auto is a leading new energy vehicle, or NEV, manufacturer in China, producing large plug-in hybrid electric sport utility vehicles, or SUVs, for family car use. Its first model six-seater Li One SUV is built on its proprietary extended-range electric vehicle technology, offering total driving range of 800 km. Unlike competitors, Li Auto adopts a single point pricing strategy for enhanced price transparency. The full-size SUV L9, built on the company’s new-generation plug-in hybrid powertrain platform, started delivery in third-quarter 2022 priced at CNY 459,800. In addition, Li Auto released the L7 SUV in February 2023. For its new model pipeline, the company plans to release pure electric model Mega in addition to plug-in hybrid electric vehicles, or PHEVs, in 2023.

Li Auto's third-quarter revenue was 4% above the high end of its guidance. Vehicle margin of 21% staged a stable trend sequentially from last quarter, with economies of scale offsetting the impact of price promotions since August. Fourth-quarter vehicle delivery guidance fell slightly short of market expectations. We lift our 2023-25 revenue and profit estimates but keep outer year profitability assumptions. We raise our fair value estimate to USD 39.10 per ADS (HKD 151.90 per share) from USD 35.50 (HKD 136.00), which implies a forward 2024 price/sales ratio of 1.5 times and price/earnings of 34.1 times.

Li Auto is a leading new energy vehicle, or NEV, manufacturer in China, producing large plug-in hybrid electric sport utility vehicles, or SUVs, for family car use. The six-seater Li One SUV is built on its proprietary extended-range electric vehicle technology, offering total driving range of 800 km. Unlike competitors, Li Auto adopts a single point pricing strategy with Li One selling at CNY 349,800 for enhanced price transparency. The full-size SUV L9, built on the company’s new-generation plug-in hybrid powertrain platform, started delivery in third-quarter 2022 priced at CNY 459,800. For its new model pipeline, Li Auto released the L7 SUV in February 2023 and delivery is set to start in March. In addition, the company also plans to release at least one pure electric model in addition to plug-in electric vehicles, or PHEVs, in 2023.

Li Auto is a leading new energy vehicle, or NEV, manufacturer in China, producing large plug-in hybrid electric sport utility vehicles, or SUVs, for family car use. The six-seater Li One SUV is built on its proprietary extended-range electric vehicle technology, offering total driving range of 800 km. Unlike competitors, Li Auto adopts a single point pricing strategy with Li One selling at CNY 349,800 for enhanced price transparency. The full-size SUV L9, built on the company’s new-generation plug-in hybrid powertrain platform, started delivery in third-quarter 2022 priced at CNY 459,800. For its new model pipeline, Li Auto released the L7 SUV in February 2023 and delivery is set to start in March. In addition, the company also plans to release at least one pure electric model in addition to plug-in electric vehicles, or PHEVs, in 2023.

Li Auto reported second-quarter revenue 11% above the high end of the firm's guidance. A vehicle margin of 21% improved by 1.3 percentage points from last quarter, largely benefiting from economies of scale and less impact from promotions for the Li ONE SUV. However, vehicle delivery guidance for the third quarter fell short of market expectations, which also indicates increasing competition from the Nio ES6 SUV in our view. We increase our 2023-25 revenue and profit estimates, but reduce the outer years' profitability assumptions. We raise our fair value estimate to USD 35.50 per ADS (HKD 136 per share) from USD 31 per ADS (HKD 120 per share), which implies a forward 2024 price/sales ratio of 1.5 times.

Li Auto’s first-quarter results look good at first glance, with revenue at the high end of the company’s guidance. However, profit turnaround came mainly from a jump in interest income following last year's capital raise and lower research and development spending. Vehicle margin of 20% for the quarter was slightly weaker than our expectation, with promotions on the Li One offsetting better product mix. Benefiting from lower operating expense ratios and CNY 419 million in interest income on bank deposits, first-quarter net profit rebounded to CNY 930 million from a net loss of CNY 11 million in the prior-year quarter. We reduce our 2023-25 operating expense estimates, but keep long-term assumptions largely unchanged. We slightly raise our fair value estimate to USD 31 per ADS (HKD 120 per share) from USD 30.50 (HKD 119), which implies a forward 2023 price/sales ratio of 2.2 times.

Li Auto is a leading new energy vehicle, or NEV, manufacturer in China, producing large plug-in hybrid electric sport utility vehicles, or SUVs, for family car use. The six-seater Li One SUV is built on its proprietary extended-range electric vehicle technology, offering total driving range of 800 km. Unlike competitors, Li Auto adopts a single point pricing strategy with Li One selling at CNY 349,800 for enhanced price transparency. The full-size SUV L9, built on the company’s new-generation plug-in hybrid powertrain platform, started delivery in third-quarter 2022 priced at CNY 459,800. For its new model pipeline, Li Auto released the L7 SUV in February 2023 and delivery is set to start in March. In addition, the company also plans to release at least one pure electric model in addition to plug-in electric vehicles, or PHEVs, in 2023.

No-moat Li Auto delivered in-line fourth-quarter revenue that was at the high end of company guidance. Vehicle margin of 20% for the quarter was also in line with our expectation, with promotions on the last-generation Li One offsetting a better product mix. Benefiting from lower operating expense levels and interest income on bank deposits, the company turned around, with net profit of CNY 257 million from accumulated net loss of CNY 2.3 billion in the first nine months of last year. We reduce our net loss forecast for 2023 and maintain our view that Li Auto will turn profitable in 2024. We lift our fair value estimate to USD 30.50 per ADS (HKD 119 per share) from USD 29 per ADS (HKD 113 per share). Our fair value implies a forward 2023 price/sales ratio of 2.2 times.

Li Auto is a leading new energy vehicle, or NEV, manufacturer in China, producing large plug-in hybrid electric sport utility vehicles, or SUVs, for family car use. The six-seater Li One SUV is built on its proprietary extended-range electric vehicle technology, offering total driving range of 800 km. Unlike competitors, Li Auto adopts a single point pricing strategy with Li One selling at CNY 349,800 for enhanced price transparency. The full-size SUV L9, built on the company’s new-generation plug-in hybrid powertrain platform, started delivery in third-quarter 2022 priced at CNY 459,800. For its new model pipeline, Li Auto released the L7 SUV in February 2023 and delivery is set to start in March. In addition, the company also plans to release at least one pure electric model in addition to plug-in electric vehicles, or PHEVs, in 2023.

Li Auto delivered in line third-quarter revenue which was at the midpoint of company’s guidance. However, vehicle margin for the quarter missed due to some one-time writeoffs related to the old model Li One. Given the enlarged losses on these oneoffs and rising operating expense levels, doubts are growing over whether the company will be able to break even next year. We increase our net loss forecast for 2022-2023 and maintain our view that Li Auto will only turn profitable in 2024.

Li Auto is a leading new energy vehicle, or NEV, manufacturer in China, producing large plug-in hybrid electric sport utility vehicles, or SUVs, for family car use. The six-seater Li One SUV is built on its proprietary extended-range electric vehicle technology, offering total driving range of 800 km. Unlike competitors, Li Auto adopts a single point pricing strategy with Li One selling at CNY 349,800 for enhanced price transparency. The new model pipeline, the full-size SUV L9, built on the company’s new-generation plug-in hybrid powertrain platform, is set to start delivery in third-quarter 2022 priced at CNY 459,800. It also plans to release at least two pure electric models in addition to plug-in electric vehicles, or PHEVs, in 2023.

Li Auto's solid second-quarter revenue exceeded the high end of company’s guidance by 24% and beat our estimate by 4%. As it reported vehicle delivery for the quarter last month, we don't view the revenue beat as a surprise to the market. Instead, we expect management’s cautious outlook for third-quarter vehicle delivery—which we attribute to the cannibalization of Li One from the launch of the new L9 SUV—to weigh on share price performance. We reduce our fair value estimate to USD 37 per ADS (HKD 144 per share) from USD 43.50 per ADS (HKD 170.50 per share). Our fair value implies a forward 2023 price/sales ratio of 2.5 times.

Li Auto is a leading new energy vehicle, or NEV, manufacturer in China, producing large plug-in hybrid electric sport utility vehicles, or SUVs, for family car use. The six-seater Li One SUV is built on its proprietary extended-range electric vehicle technology, offering total driving range of 800 km. Unlike competitors, Li Auto adopts a single point pricing strategy with Li One selling at CNY 349,800 for enhanced price transparency. The new model pipeline, the full-size SUV L9, built on the company’s new-generation plug-in hybrid powertrain platform, is set to start delivery in third-quarter 2022 priced at CNY 459,800. It also plans to release at least two pure electric models in addition to plug-in electric vehicles, or PHEVs, in 2023.

We initiate coverage on Li Auto with a no-moat rating and a fair value estimate of USD 43.50 per ADS (HKD 170.50 per share). As a leading plug-in hybrid electric vehicle, or PHEV, manufacturer targeting family car users, Li Auto will benefit amid the vehicle electrification trend and the increasing family size in China. Given significant growth opportunities, we forecast a 75.7% 2021-24 revenue CAGR with the first profitable year in 2024. Our fair value estimate implies a forward 2023 price/sales ratio of 3.1 times.

Li Auto is a leading new energy vehicle, or NEV, manufacturer in China, producing large plug-in hybrid electric sport utility vehicles, or SUVs, for family car use. The six-seater Li One SUV is built on its proprietary extended-range electric vehicle technology, offering total driving range of 800 km. Unlike competitors, Li Auto adopts a single point pricing strategy with Li One selling at CNY 349,800 for enhanced price transparency. The new model pipeline, the full-size SUV L9, built on the company’s new-generation plug-in hybrid powertrain platform, is set to start delivery in third-quarter 2022 priced at CNY 459,800. It also plans to release at least two pure electric models in addition to plug-in electric vehicles, or PHEVs, in 2023.