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<Research>CICC Axes LI AUTO-W (02015.HK) TP to $130; Adjustment Period in 1-2Q
Recommend 13 Positive 15 Negative 11 |
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CICC released a report on LI AUTO-W (02015.HK), of which 1Q results were roughly in line with street consensus, with revenue falling 38.6% QoQ to RMB25.63 billion, and non-GAAP net profit dropping 72.2% QoQ to RMB1.28 billion. 1Q deliveries declined QoQ due to the high base at the end of last year and seasonality. This, coupled with a relatively fixed expense structure, led to a marked QoQ plunge in 1Q net profit. According to the report, LI AUTO-W underwent a period of adjustment in 1-2Q, sweetened by the recovery in the growth of price reduction orders. GPM were solid in 1Q. But looking ahead to the current quarter, the price cuts have been reflected in the market. An increase in the share of L6 sales may depress automotive margins. The company targeted deliveries of between 105,000 and 110,000 units for 2Q, while the broker expected deliveries to escalate sharply QoQ going forward. Due to the impact of the current order hike and the postponement of the launch of pure electric vehicles to 2025, CICC trimmed its recurring net profit forecasts for 2024 and 2025 by 37% and 25% to RMB10.1 billion and RMB17.3 billion, respectively. Considering the company's restructuring and adjusting the pace of launching new vehicles, the broker axed its H-share TP by 44% to HK$130, and rated it Outperform. AAStocks Financial News |
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