20260529-招银国际-理想汽车-W-02015.HK-Earnings_recovery_may_take_time_after_1Q26_loss_5页_1mb

Li Auto Inc. (LI US/2015 HK) Summary

Core Content Overview

Li Auto Inc. has reported its largest quarterly net loss since its 2020 IPO, with the 1Q26 net loss reaching RMB2.3bn, despite a strict control of SG&A expenses. The company's financial performance and valuation have been revised downward, with net profit forecasts for FY26 and FY27 cut significantly, leading to a HOLD rating for both ADS and H-shares. The target prices have also been reduced from US$18.00/HK$70.00 to US$16.00/HK$62.00, based on a revised FY27E P/E of 18x.

Key Financial Performance

1Q26 Highlights:

• Revenue: Declined 11% YoY to RMB23.0bn, aligning with prior forecasts.
• Gross Margin (GPM): Narrowed 10ppts QoQ to 7.9%, 0.4ppts above forecast.
• SG&A Expenses: RMB650mn lower than forecast, contributing to a narrower-than-expected net loss.
• Net Loss: RMB2.3bn, marking the largest since 2020.

FY26-27E Forecasts:

• Revenue: RMB131,191mn (FY26E), RMB151,803mn (FY27E).
• Gross Profit: RMB19,702mn (FY26E), RMB26,425mn (FY27E).
• Net Profit: RMB511mn (FY26E), RMB6,140mn (FY27E).
• GPM: 15.0% (FY26E), 17.4% (FY27E), 17.1% (FY28E).
• Net Margin: 0.4% (FY26E), 4.0% (FY27E), 4.6% (FY28E).

Key Challenges and Outlook

• Portfolio Maturity and Mix Shifts: The company's model mix is shifting towards lower-margin models like the i6, while premium models like the L9 are facing reduced sales expectations. This limits near-term upside potential.
• GPM Pressure: The GPM is expected to remain under pressure in FY26 and FY27, with a projected recovery in Q426 to 18-19%. The company's ability to differentiate its products from competitors has diminished, leading to a structural GPM decline.
• Sales Volume: The FY26E sales volume forecast is 0.49mn units, with management guiding a monthly L9 sales volume of 6,000-8,000 units post-redesign. Growth headroom for FY27-28E is limited due to a mature model portfolio.

Valuation and Market Performance

• P/E Ratio: Currently trading at 213x FY26E and 18x FY27E, which is considered unattractive.
• Stock Performance:
  • 1-month return: -11.2% for LI US, -9.8% for 2015 HK.
  • 3-month return: -10.3% for LI US, -12.1% for 2015 HK.
  • 6-month return: -14.2% for LI US, -16.0% for 2015 HK.
• Market Cap:
  • LI US: RMB17,075.82mn.
  • 2015 HK: HKD130,828.05mn.

Earnings Revisions

• Revenue: Revised down by 0.4% for FY26E and -1.3% for FY27E.
• Gross Profit: Revised down by -14.2% for FY26E and -5.8% for FY27E.
• Operating Profit: Revised down by -179.4% for FY26E and -27.3% for FY27E.
• Net Profit: Revised down by -84.7% for FY26E and -20.7% for FY27E.

CMBIGM vs. Consensus

• Revenue: CMBIGM forecasts are slightly higher than the consensus for FY26E and FY27E but lower for FY28E.
• Gross Profit: CMBIGM forecasts are lower than the consensus for FY26E and FY27E.
• Operating Profit: CMBIGM forecasts are significantly lower than the consensus for FY26E.
• Net Profit: CMBIGM forecasts are much lower than the consensus for FY26E and FY27E.

Key Risks

• Sales Volume: Potential deviations from forecasted sales volumes could impact performance.
• GPM: Continued pressure on gross margin could affect profitability.
• Sector Re-rating/De-rating: Changes in the broader sector could impact valuation.
• Investment Strategy: CMBIGM may have conflicting interests due to its investment banking activities.

Analyst Certification

The primary analyst certifies that:

1. All views expressed reflect personal opinions.
2. No compensation is directly or indirectly linked to the report's content.
3. The analyst has not traded in the stock covered in the report within 30 days prior to its release.
4. The analyst will not trade in the stock within 3 business days after the report's release.
5. The analyst has no financial interests in the covered companies.

CMBIGM Ratings

• BUY: Potential return of over 15% over next 12 months.
• HOLD: Potential return of +15% to -10% over next 12 months.
• SELL: Potential loss of over 10% over next 12 months.
• NOT RATED: Not rated by CMBIGM.
• OUTPERFORM: Industry expected to outperform the relevant market benchmark.
• MARKET-PERFORM: Industry expected to perform in-line with the relevant market benchmark.
• UNDERPERFORM: Industry expected to underperform the relevant market benchmark.

Disclaimer

• Risks: Trading in securities involves risks, and past performance does not guarantee future results.
• No Investment Advice: CMBIGM does not provide individually tailored investment advice.
• Use of Information: The report is for information purposes only and not for investment decisions.
• Liability Disclaimer: CMBIGM is not liable for any losses incurred from relying on the report.
• Confidentiality: The report is for the intended recipients only and cannot be reproduced or distributed without prior consent.

Conclusion

Li Auto Inc. is currently facing challenges with earnings and valuation, primarily due to a decline in gross margin and a shift in model mix. While the company has shown cost control improvements, its ability to maintain profitability and differentiate its products in a competitive market remains under scrutiny. The HOLD rating and revised target prices reflect the analysts' cautious outlook on the company's near-term prospects and valuation.