ConsumerDaily Briefs

Daily Brief Consumer: Li Auto , Lululemon Athletica, Meituan and more

In today’s briefing:

  • [Li Auto (LI US, BUY, TP US$22) TP Change]: Expanding Outside of SUV Is Still the US$mn Question
  • LiAuto (LI US, BUY, TP:USD25.0): Good 2Q-2024 Results, on Track to Match Consensus
  • Lululemon 2Q’24 Update
  • [Meituan (3690 HK, BUY, TP HK$165) TP Change]: Better Margin Outlook from Rider Cost and Execution


[Li Auto (LI US, BUY, TP US$22) TP Change]: Expanding Outside of SUV Is Still the US$mn Question

By Eric Wen

  • LI Auto (LI) reported C2Q24 top line, non-GAAP operating profit and GAAP net income 5.0%, (5.2%) and (20%) vs. our estimates, and in-line, 53% and 6.8% vs. consensus.
  • We believe the market has oversold the company.But in our view,the key question is LI’s next product entry under the backdrop of Xiaomi consolidating its position in the EV sector. 
  • We believe LI should continue to explore its “family car” brand niche in entering the sedan market. If so, volume and margin can co-exist.

LiAuto (LI US, BUY, TP:USD25.0): Good 2Q-2024 Results, on Track to Match Consensus

By Mohshin Aziz

  • 2Q-2024 results is within ours and consensus expectations. Competition is tough, but LiAuto managed to remain profitable   
  • Management is boosting R&D expenditure and boost spending on  expanding number of charging stations, all for the benefit of its customers. 
  • Our fair value of USD25 implies 16x FY25 PE – average for auto growth stock. A bargain with 3-year CAGR of 38%, net cash, and churns high free cash flow.

Lululemon 2Q’24 Update

By MBI Deep Dives

  • It is far from common for a stock to be up 4% after missing the revenue guide for the quarter and slashing the full-year revenue guide for the year.
  • That’s exactly what happened with Lululemon today which should tell you the kind of sentiment going into the earnings!
  • The crux of the bear thesis on Lulu usually circles around their US business. 

[Meituan (3690 HK, BUY, TP HK$165) TP Change]: Better Margin Outlook from Rider Cost and Execution

By Ying Pan

  • Meituan reported C2Q24 revenue 1.4%/2.3% higher than our estimate/consensus and adjusted net income 17%/28% higher than our estimate/consensus, thanks to lower rider cost and less subsidies to users;
  • Although poor economy has plunged Meituan’s merchant base to the loss-making zone, we expect Meituan’s take rate to persist as take-out order represents incremental revenue to offset merchants’ fixed cost.
  • We reiterate BUY rating and raise TP to HK$165/share. Catalysts are reduced competition, expansion of Pinhaofan, and overseas expansion.

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