2025-06-09-花旗集团-理想汽车（LI）_理想汽车（LI_2015.HK）_模型更新_14页_923kb

Li Auto (LI/2015.HK) Summary

Core Content

Li Auto is a developer, manufacturer, and distributor of premium smart electric SUVs in China, recognized as the first mover in the extended-range electric vehicle (EREV) market. The company has two listings: an ADR (LI) and an H-share (2015.HK). This document outlines the latest financial forecast, investment strategy, valuation, and risk assessment from Citi Research.

Financial Forecast and Valuation

• 2025/26E Net Profit (NP): Rmb8,456/10,921 million
• 2027E NP Forecast: Rmb14,489 million
• NP CAGR (2025-2027): 31%
• Target Price (TP):
  • Li Auto ADR (LI): US$33.90 / HK$130.30
  • Li Auto Inc (2015.HK): HK$130.30
• Valuation Method: Based on a 1.0x 2025E PEG (Price-to-Earnings Growth) valuation.

The target price was slightly adjusted downward from the previous estimate of US$34.30 / HK$131.90, reflecting a more conservative approach due to anticipated challenges such as model aging, BEV margin dilution, and rising competition.

Investment Strategy

• Rating: Neutral for both Li Auto ADR (LI) and H-share (2015.HK)
• Reasoning:
  • Despite being the EREV market leader, Li Auto faces potential downside risks in 2025, including:
    • L series model aging
    • BEV margin dilution
    • Increasing peer competition
    • High-end brand not benefiting from general consumption downgrade
  • The current valuation is seen as fair, with a balanced risk/reward ratio
  • No clear catalysts or valuation drivers to justify a positive or negative investment view

Key Risks

Downside Risks:

1. Sharp economic deterioration in China leading to weaker demand for Li Auto's products
2. Defective products harming brand reputation
3. Liquidity risks due to sales performance falling below expectations or costs overrunning

Upside Risks:

1. Better-than-expected sales volume
2. Quicker-than-expected autonomous driving technology advancement

Catalyst Watch and Short-Term Views

• Catalyst Watch (CW): Indicates the analyst expects a share price movement in response to near-term events
  • CW Status: Added on 13-Jun-23, removed on 14-Jul-23
• Short-Term View (STV): Reflects the analyst's expectation of short-term price direction
  • STV Status: Added on 13-Jun-23, removed on 14-Jul-23

Historical Ratings and Target Prices

Li Auto Inc (2015.HK):

• Rating History: 1H (multiple dates), 1, 2
• Target Price History: HK$130.30 (as of 06 Jun 2025), with previous estimates including HK$131.90, HK$113.80, etc.
• Closing Price: HK$116.80 (as of 06 Jun 2025)

Li Auto (LI):

• Rating History: 1H (multiple dates), 1, 2
• Target Price History: US$33.90 (as of 06 Jun 2025), with previous estimates including US$34.30, US$29.60, etc.
• Closing Price: US$29.52 (as of 06 Jun 2025)

Analyst Information

• Analyst: Jeff Chung (AC), Kyle Wu, Betty Li
• Contact Information:
  • Jeff Chung: +852-2501-2787, jeff.m.chung@citi.com
  • Kyle Wu: +852-2501-8483, kyle.wu@citi.com
  • Betty Li: +852-2298-1573, betty.li@citi.com

Disclosure and Compliance

• Citi Research analysts are not compensated based on specific recommendations or transactions
• Analysts may have a positive view of the company, which could influence corporate access events
• The Firm is a market maker in Li Auto's publicly traded equity securities
• Citi may have a commercial relationship with Li Auto due to its global operations
• Citi Research has policies to manage potential conflicts of interest

Investment Rating Definitions

• Buy (1): ETR of 15% or more (or 25% for High Risk stocks)
• Neutral (2): No clear ETR direction
• Sell (3): Negative ETR
• Catalyst Watch/STV Calls:
  • Upside calls correspond to a buy recommendation
  • Downside calls correspond to a sell recommendation
  • No View corresponds to a Hold in the ratings distribution table

Additional Disclosures

• Citi Research disseminates content to both institutional and retail clients
• Some content may be distributed via third-party aggregators
• The Firm may have a commercial relationship with the subject company
• Citi Research is not registered with FINRA for non-US research analysts
• The opinions expressed are those of the authors and not necessarily those of the Firm or its affiliates

Regulatory Information

• Citi Research complies with FINRA, European, and Israeli regulations
• Past performance is not indicative of future results
• Forecasts are not guarantees
• The document is for informational purposes only and not an offer to buy or sell securities

Summary of Key Points

• Li Auto is a leader in the EREV market in China
• Citi Research maintains a Neutral rating for both the ADR and H-share
• Target prices are based on a 1.0x PEG valuation with a 31% NP CAGR
• Anticipated challenges include model aging, BEV margin dilution, and rising competition
• Valuation is considered fair, with a balanced risk/reward profile
• Key risks include economic deterioration, product defects, and liquidity concerns
• Upside risks include better-than-expected sales and faster autonomous driving advancements
• Citi Research has a history of rating and target price changes for both listings
• Analysts are not directly compensated based on specific recommendations
• The document includes important disclosures and compliance information