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<Research>JPM Cuts LI AUTO-W TP to HKD56, Reiterates Underweight on Mounting Competition
Recommend 4 Positive 3 Negative 7 |
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LI AUTO-W (02015.HK)'s 1Q results were broadly in line with market expectations but about 15% below JP Morgan's forecasts. The broker upheld a cautious long-term view on Li Auto, believing that the highly competitive market environment implies limited room for volume and earnings upside surprise. At the results briefing, management outlined several strategies, including upgrading the product mix. The new L9 and the upcoming L8 will reinforce the high-end SUV positioning, which should help gross margin gradually recover from 2Q onward. On overseas expansion, the L-series EREV models have entered the Middle East and Central Asia markets, with further expansion into SE Asia starting in May. Battery electric vehicle (BEV) models are set to enter Europe in 2H26, followed by right-hand-drive products launching in Hong Kong and Singapore. However, JP Morgan noted that several Chinese competitors, including NIO, XPeng, Huawei, Xiaomi, Zeekr and Leapmotor, are launching EREV and BEV products with increasing overlap with Li Auto's core models in terms of pricing, specifications, sales channels and target family buyers. This may weigh on revenue growth momentum, while price competition, promotions and input cost inflation could continue to squeeze profit margins. The broker maintained its Underweight rating on LI AUTO-W, cutting the Hong Kong-listed shares TP from HKD60 to HKD56, and lowering the TP for Li Auto Inc. (LI.US) ADR from USD15.5 to USD14. Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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