Leapmotor (9863 HK) Summary
Core Content and Key Highlights
Leapmotor is projected to continue its strong growth trajectory, with the analyst maintaining a BUY rating and a target price of HK$60.00. The company is expected to deliver robust performance in FY26E and beyond, driven by its sales momentum and strategic partnerships, particularly with Stellantis and FAW.
1Q26 Earnings Performance
- Revenue increased by 8% YoY and 1% above forecast, reaching RMB10,820 million.
- Gross margin (GPM) fell to 9.4%, 5.7 ppts lower than the previous quarter and 2.4 ppts below forecast, primarily due to lower other income and diseconomies of scale.
- SG&A and R&D expenses were higher than expected, but offset by greater government grants.
- Net loss was RMB390 million, RMB23 million better than forecast, indicating improved performance compared to initial expectations.
2Q26 Outlook
- Sales volume is projected to be 0.24–0.25mn units, with GPM of 12–13%.
- This guidance is viewed as positive, and the company is expected to post an all-time high net profit in 2Q26E.
- This gives more confidence in its FY26E profitability.
FY26E Sales and Profit Forecast
- Total sales volume is revised up by 8% to 0.97mn units, driven by strong overseas sales.
- Net profit is forecasted at RMB3.5 billion, 3% lower than the previous estimate, due to higher overseas sales.
- FY27E net profit is revised up by 10% to RMB5.0 billion, reflecting improved profitability expectations.
Overseas Sales and Profit Contribution
- Leapmotor International JV is expected to contribute RMB871 million in FY27E with 0.28mn units sold.
- GPM for vehicles sold to the JV is projected to increase from FY28E onwards, according to the agreement with Stellantis.
- Revenue from other automakers may be underestimated, as Leapmotor has been sacrificing profits in overseas markets to build strategic partnerships.
Valuation and Key Risks
- P/E ratio for FY26E is 16.0, while for FY27E and FY28E it is 11.3 and 7.5, respectively.
- Key risks include lower sales or GPM than expected and sector de-rating.
Financial Overview
Revenue Projections (RMB mn)
| Year |
FY24A |
FY25A |
FY26E |
FY27E |
FY28E |
| Revenue |
32,164 |
64,732 |
103,556 |
115,442 |
139,654 |
| YoY Growth |
92.1% |
101.3% |
60.0% |
11.5% |
21.0% |
Net Profit Projections (RMB mn)
| Year |
FY24A |
FY25A |
FY26E |
FY27E |
FY28E |
| Net Profit |
538.4 |
3,484.0 |
4,990.2 |
7,560.0 |
|
Gross Margin (Gross Profit Margin)
| Year |
FY24A |
FY25A |
FY26E |
FY27E |
FY28E |
| Gross Margin |
14.5% |
13.3% |
13.5% |
14.0% |
|
Operating Margin
| Year |
FY24A |
FY25A |
FY26E |
FY27E |
FY28E |
| Operating Margin |
0.4% |
2.6% |
2.9% |
4.3% |
|
Net Margin
| Year |
FY24A |
FY26E |
FY27E |
FY28E |
| Net Margin |
1.1% |
3.4% |
4.3% |
5.4% |
Shareholding and Financial Metrics
Shareholding Structure
| Shareholder |
Percentage |
| Mr. Jiangming Zhu and his concert party |
23.9% |
| Stellantis N.V. |
20.0% |
Stock Data
| Metric |
Value (HK$) |
| Market Cap |
64,294.4 million |
| Avg 3 mths t/o |
507.7 million |
| 52w High/Low |
73.50 / 38.26 |
| Total Issued Shares |
1,421.8 million |
Share Performance
| Period |
Absolute |
Relative |
| 1-mth |
-16.9% |
-16.9% |
| 3-mth |
-0.1% |
2.7% |
| 6-mth |
-18.5% |
-16.6% |
Analyst Ratings and Outlook
- CMBIGM Rating: BUY
- Target Price: HK$60.00
- Up/Downside: 32.7%
- Current Price: HK$45.22
Key Financial Ratios
| Ratio |
FY26E |
FY27E |
FY28E |
| P/E |
16.0 |
11.3 |
7.5 |
| P/B |
3.1 |
2.4 |
1.8 |
| P/CFPS |
2.3 |
4.4 |
2.7 |
Summary of Key Points
- Leapmotor is expected to maintain strong growth, with a BUY rating and target price of HK$60.00.
- 1Q26 earnings were largely in line with expectations, with net profit better than forecast.
- 2Q26 guidance is positive, with higher net profit anticipated.
- Overseas sales are expected to contribute meaningfully to profit from FY27E, despite lower GPM in FY26E.
- Strategic partnerships with Stellantis and FAW are seen as key to long-term growth.
- Valuation is based on FY26E P/E, with key risks including lower-than-expected sales/GPM and sector de-rating.
Financial Highlights
- Revenue is expected to grow significantly, with 60% YoY growth in FY26E.
- Gross profit is projected to increase, with GPM improving from FY26E to FY28E.
- Net profit is expected to grow from RMB3.5 billion in FY26E to RMB7.56 billion in FY28E.
- Operating profit is expected to increase from RMB2.7 billion in FY26E to RMB6.02 billion in FY28E.
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