Li Auto’s shares saw a significant surge in Hong Kong after the Chinese electric vehicle manufacturer surpassed earnings expectations. The company experienced jumps in quarterly profit and revenue, driven by increasing demand for its SUVs and other vehicles.
Impressive Financial Performance
The shares rose by 20%, reaching 167.10 Hong Kong dollars (US$21.36), marking the largest one-day percentage gain in almost two years. Following a notable increase in U.S.-listed ADRs, Li Auto’s shares moved into positive territory for the year, with 12-month gains reaching 80%.
In the fourth quarter, Li Auto reported that revenue more than doubled compared to the same period the previous year, reaching 41.73 billion yuan (US$5.80 billion). This growth was fueled by a nearly tripled delivery rate, particularly of its flagship SUVs. As a result, quarterly profit also doubled compared to the previous year, leading to the company’s first full-year profit.
Analyst Insights
Deutsche Bank analyst Edison Yu noted that Li Auto outperformed revenue expectations due to higher average selling prices. Additionally, the company’s first-quarter volume outlook was considered better than anticipated. Li Auto projected deliveries of 100,000-103,000 vehicles for the first quarter, representing a decrease from the previous quarter but an increase from the same period the prior year.
CCB International analyst Ke Qu praised the results as “very robust,” highlighting Li Auto’s strong supply chain management. The anticipated decline in first-quarter volume was attributed to seasonal factors like the Lunar New Year holidays and increased deliveries from emerging competitor Huawei-backed Seres, which surpassed Li Auto’s sales in January.
Future Plans and Market Confidence
Analysts showed excitement for Li Auto’s upcoming releases throughout the year. The company announced plans to launch five new models in 2024 and aims to sell up to 800,000 units in total.
Nomura analyst Joel Ying expressed confidence in Li Auto’s business plan for 2024, emphasizing their solid pipeline and shipment delivery strategies for the upcoming quarters. The company appears well-prepared for market conditions anticipated in 2024.
