20230228-招银国际-理想汽车-LI.O-Well_on_track_4页_829kb

Li Auto Inc. (LI US) Company Update Summary

Core Content

Li Auto Inc. (LI US) is highlighted as a top pick in the Chinese New Energy Vehicle (NEV) sector, with strong performance and growth expectations. The report outlines the company's financial results, sales guidance, valuation, and key risks.

Key Financial Highlights

4Q22 Earnings

• Revenue: Increased by 66% YoY, aligning with previous forecasts.
• Net Profit: RMB 257 million, slightly above the estimated RMB 205 million.
• Gross Margin: 20.2%, 1.7 ppts below expectations, but SG&A and R&D ratios were narrower than projected.

FY23 Sales Guidance

• Sales Volume: Management targets 280,000-300,000 units for the SUV segment priced between RMB 300,000-500,000.
• Monthly Sales: Aims for 30,000 units by the end of 2Q23 with the launch of the Air version of the L7.
• Revised Forecast: FY23E sales volume is revised up by 20,000 units to 270,000 units, with a more conservative approach due to potential cannibalization.

Profitability Outlook

• Projected Net Profit for FY23E: RMB 1.3 billion.
• Gross Margin: Expected to reach 21.9%, offsetting R&D and SG&A expenses (11% each).
• Net Profit Margin: Projected at 1.3% for FY23E.

Valuation and Investment Rating

• Current Price: US$23.23
• Target Price: US$44.00
• Rating: BUY
• P/S Ratio: 3.0x (revised from 3.3x)
• Potential Return: Over 15% over the next 12 months

Key Risks

• Slower development in autonomous driving technology.
• Lower-than-expected sales volume or gross margin.
• Sector-wide de-rating.

Financial Summary

Revenue Growth

• FY20A: RMB 9,457 million
• FY21A: RMB 27,010 million (+185.6% YoY)
• FY22E: RMB 45,287 million (+67.7% YoY)
• FY23E: RMB 96,925 million (+114.0% YoY)
• FY24E: RMB 119,550 million (+23.3% YoY)

Net Profit

• FY20A: RMB -792 million
• FY21A: RMB -321 million
• FY22E: RMB -2,012 million
• FY23E: RMB 1,280 million (turning positive)
• FY24E: RMB 1,248 million (slight decline)

Key Ratios

• Gross Margin: FY23E at 21.9%
• Operating Margin: FY23E at -0.2%
• Net Profit Margin: FY23E at 1.3%
• Current Ratio: FY23E at 1.6
• Inventory Turnover Days: FY23E at 26
• Payable Turnover Days: FY23E at 150

Shareholding and Stock Data

• Market Cap: US$24,217 million
• Avg 3-Month Trading Volume: US$210 million
• 52-Week High/Low: US$41.49/US$12.52
• Total Issued Shares: 2,085 million
• Shareholders:
  • Li Xiang: 22.3%
  • Wang Xing: 18.8%
  • Others: 58.9%

Share Performance

• 1-Month: -1.4% (Relative: +9.3%)
• 3-Month: +26.5% (Relative: +12.9%)
• 6-Month: -25.3% (Relative: -27.3%)

CMBIGM vs. Consensus

• Revenue: CMBIGM forecast is slightly higher than consensus (270,000 units vs. 260,000 units).
• Gross Profit: CMBIGM forecast is lower than consensus.
• Net Profit: CMBIGM forecast is significantly lower than consensus.
• Gross Margin: CMBIGM forecast is slightly lower than consensus.
• Operating Margin: CMBIGM forecast is more negative than consensus.
• Net Margin: CMBIGM forecast is more positive than consensus.

Analyst Certification

• The analyst certifies that the views expressed accurately reflect their personal opinions.
• No part of their compensation is directly or indirectly related to the report's views.
• The analyst confirms no trading in the stock within 30 days prior to the report and no trading for 3 days after.

Important Disclosures

• The report is not tailored to individual investors.
• Past performance does not guarantee future results.
• CMBIGM is not liable for losses or damages incurred from reliance on the report.
• The report is for informational purposes only and should not be construed as an offer or solicitation to buy/sell securities.

Legal and Distribution Notes

• UK Recipients: Only for persons under Article 19(5) of the Financial Services and Markets Act 2000.
• US Recipients: Only for "major US institutional investors" under Rule 15a-6; not for general distribution.
• Singapore Recipients: Distributed by CMBI (Singapore) Pte. Limited, an exempt financial adviser regulated by MAS.

Conclusion

Li Auto is positioned as a strong contender in the Chinese NEV market, with positive earnings expected in FY23E and a BUY rating maintained. The company's financial performance and strategic positioning are viewed favorably, though there are notable risks including market dynamics and technological progress.