Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>LI Auto’s decision to push out its BEV launch to 2025 is a delay of multi-faces at a time when China’s EV market is chaotically.</li>
<li>We keep rating @BUY because LI still possesses the SUV niche, enjoys a healthy margin and have ample cash. </li>
<li>We cut TP from US$40 to US$25 and maintain BUY.</li>
</ul>


LI Auto’s decision to push out its BEV launch to 2025 is a delay of multi-faces at a time when China’s EV market is chaotically.
We keep rating @BUY because LI still possesses the SUV niche, enjoys a healthy margin and have ample cash. 
We cut TP from US$40 to US$25 and maintain BUY.


[Li Auto (LI US, BUY, TP US$25) TP Change]: Delaying BEV Is the Wrong Approach to Competition

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>We are of the view that Li Auto has lowered priority for its FY24E profitability and the sell-off after the 1Q24 earnings call has largely priced in such management mentality.</li><li>We believe the key lies in its new BEV strategy, EREV sales recovery in 2H24 and FY25 sales growth with BEVs being postponed.</li><li>1Q24 GP in line; R&amp;D and SG&amp;A dragged NP. Li Auto’s 1Q24 revenue was about 3% higher than our prior forecast, largely due to its other sales and services.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

We are of the view that Li Auto has lowered priority for its FY24E profitability and the sell-off after the 1Q24 earnings call has largely priced in such management mentality.We believe the key lies in its new BEV strategy, EREV sales recovery in 2H24 and FY25 sales growth with BEVs being postponed.1Q24 GP in line; R&amp;D and SG&amp;A dragged NP. Li Auto’s 1Q24 revenue was about 3% higher than our prior forecast, largely due to its other sales and services.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Li Auto Inc. (LI US) - Is the Mega Lesson Worthwhile?

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>Operating profit turned negative in 1Q24 compared to 1Q23 due to the price war and the failure of new model.</li>
<li>The company disappeared from the industry top-10 list of sales volume and revenue growth slowed down to zero in April.</li>
<li>All cross-sectional comparisons suggest a Sell rating for the stock.</li>
</ul>


Operating profit turned negative in 1Q24 compared to 1Q23 due to the price war and the failure of new model.
The company disappeared from the industry top-10 list of sales volume and revenue growth slowed down to zero in April.
All cross-sectional comparisons suggest a Sell rating for the stock.


Li Auto (LI US): 1Q24, A List of Bad News

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Event-Driven

<ul>
<li>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

<ul>
<li>LI Auto reported C4Q23 top line, non-GAAP operating profit and GAAP net income (6.2%), 13% and 81% vs. our estimates and 4.9%, 52% and 102% vs. consensus.</li>
<li>We believe LI can beat our delivery estimate on exports, but can also miss the consensus on gross margins if its 2024 volume target is met by sedans;</li>
<li>We raise our TP by US$5 to US$52 and reiterate BUY.</li>
</ul>


LI Auto reported C4Q23 top line, non-GAAP operating profit and GAAP net income (6.2%), 13% and 81% vs. our estimates and 4.9%, 52% and 102% vs. consensus.
We believe LI can beat our delivery estimate on exports, but can also miss the consensus on gross margins if its 2024 volume target is met by sedans;
We raise our TP by US$5 to US$52 and reiterate BUY.


[Li Auto Inc. (LI US, BUY, TP US$52) TP Change]: What Can Go Wrong & Go Right in LI Becoming BYD #2

China

Li Auto Inc. manufactures automobiles. The Company designs, develops, and sells smart new energy electric sport utility vehicles. Li Auto conducts businesses in China.

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Li Auto (LI US)

[Li Auto (LI US, BUY, TP US$25) TP Change]: Delaying BEV Is the Wrong Approach to Competition

LI Auto delays BEV launch to 2025 in chaotic Chinese EV market, but still rated as a buy due to SUV niche, healthy margin, and ample cash. Target...

Blue Lotus Research Institute

Li Auto Inc. (LI US) - Is the Mega Lesson Worthwhile?

We are of the view that Li Auto has lowered priority for its FY24E profitability and the sell-off after the 1Q24 earnings call has largely priced...

CMB International

Li Auto (LI US): 1Q24, A List of Bad News

Operating profit turned negative due to the price war and the failure of new model. Sales volume disappeared from the industry top-10 list and...

Ming Lu

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

[Li Auto Inc. (LI US, BUY, TP US$52) TP Change]: What Can Go Wrong & Go Right in LI Becoming BYD #2

LI Auto exceeded expectations in top line, operating profit, and net income, with potential for increased exports but possible gross margin...

Blue Lotus Research Institute

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[Li Auto (LI US, BUY, TP US$25) TP Change]: Delaying BEV Is the Wrong Approach to Competition

​LI Auto delays BEV launch to 2025 in chaotic Chinese EV market, but still rated as a buy due to SUV niche, healthy margin, and ample cash. Target...

Blue Lotus Research Institute

Li Auto Inc. (LI US) - Is the Mega Lesson Worthwhile?

We are of the view that Li Auto has lowered priority for its FY24E profitability and the sell-off after the 1Q24 earnings call has largely priced...

CMB International

Li Auto (LI US): 1Q24, A List of Bad News

Operating profit turned negative due to the price war and the failure of new model. Sales volume disappeared from the industry top-10 list and...

Ming Lu

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

[Li Auto Inc. (LI US, BUY, TP US$52) TP Change]: What Can Go Wrong & Go Right in LI Becoming BYD #2

​LI Auto exceeded expectations in top line, operating profit, and net income, with potential for increased exports but possible gross margin...

Blue Lotus Research Institute

LI Auto delays BEV launch to 2025 in chaotic Chinese EV market, but still rated as a buy due to SUV niche, healthy margin, and ample cash. Target...

LI Auto exceeded expectations in top line, operating profit, and net income, with potential for increased exports but possible gross margin...