<Results First Take> Li Auto (2015 HK/LI US): 4Q23 non-GAAP results beat expectations on strong vehicle margin
- 4Q23 revenue recorded Rmb41.7bn, beating market expectations by 5%, thanks to the strong vehicle shipment
- 4Q23 non-GAAP net profit hit record level of Rmb4.6bn, 33% above consensus, thanks to stronger than expected vehicle gross margins
- Management guided 1Q24 volume shipment of 100-103k units (90%-96% y-o-y growth) and total revenue of RMB31.3-32.2bn (66%-71% y-o-y growth). We believe target is resonable
- We currently have BUY ratings and TPs of HK$170 (2015 HK)/US$43 (LI US)
4Q23 net profit beating expectations by 33%. Li Auto recorded revenue of Rmb41.7bn (+136% y-o-y, +20% q-o-q), of which vehicle sales recorded Rmb40.4bn (+134% y-o-y, +20% q-o-q). The revenue growth was mainly driven by increase in vehicle deliveries, which increased 185% y-o-y to 131,805 vehicles in 4Q23, but partially offset by the lower ASP (down ~4% q-o-q due to competition and mix change). Gross margin recorded a 3.3ppts/1.5ppts expansion y-o-y/q-o-q to 23.5% in 4Q23, with vehicle margins increasing 2.7ppts y-o-y/1.5ppts q-o-q to 22.7%. Non-GAAP net profit hitting record level of Rmb4.6bn, +374% y-o-y and +32% q-o-q, about 33% above consensus.
Sales of new models to drive sales; but management guided prudent 1Q24 growth. The Company plans to have eight EV models by end 2024, split equally between EREV and BEV. MEGA, its flagship MPV is schedule for sales in Mar-24. As such, the Company target to achieve 800k unit sales in 2024, more than double that of 2023. However, market competition is expected to persist and that could pressure on its product margins in 2024. The management expects 1Q24 total revenue to be between Rmb31.25-32.19bn, a 66.3-71.3% y-o-y increase, supported by anticipated vehicle deliveries of between 100-103k units, a 90.2%-95.9% y-o-y increase. Based on Jan-24 deliveries of 31.1k units, it implies Feb-Mar 24 deliveries at 68.8-71.8k units. Using the mid-point data, total revenue target is about 13% below consensus. However, considering the current challenging market environment, we believe the 1Q24 target is reasonable. Our FY24/25 earning assumptions are under review.
