Li Auto Inc. (LI) on Q4 2024 Results - Earnings Call Transcript
Operator: Hello, ladies and gentlemen, thank you for standing by for Li Auto's Fourth Quarter and Full Year 2024 Earnings Conference Call. At this time, all participants are in listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Janet Chang, Investor Relations Director of Li Auto. Please go ahead, Janet. Janet Chang: Thank you. Good evening and good morning, everyone. Welcome to Li Auto's fourth quarter and full year 2024 earnings conference call. The company's financial and operating results were published in our press release earlier today and are posted on the company's IR website. On today's call, we will have our Chairman and CEO, Mr. Xiang Li; and our CFO, Mr. Johnny Tie Li, to begin with prepared remarks. Our President, Mr. Donghui Ma, and Senior Vice President, Mr. James Liangjun Zou, will join for the Q&A discussion. Before I continue, please be reminded that today's discussion will contain forward-looking statements made under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the views expressed today. Further information regarding risks and uncertainties is included in certain company filings with the US Securities and Exchange Commission and the Stock Exchange of Hong Kong Limited. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note that Li Auto's earnings press release and this conference call include discussions of unaudited US GAAP financial information as well as unaudited non-GAAP financial measures. Please refer to Li Auto's disclosure documents on the IR section of our website, which contains a reconciliation of the unaudited non-GAAP measures to comparable US GAAP measures. Our CEO will start his remarks in Chinese. There will be English translation after he finishes all his remarks. With that, I will now turn the call over to our CEO, Mr. Xiang Li. Please go ahead. Xiang Li: [Foreign Language] [Interpreted] Hi, everyone. Welcome to today's conference call. China's NEV market maintained rapid growth in 2024. According to insurance registration data from the China Automotive Technology & Research Center, China's NEV penetration rate exceeded 50% for many consecutive months in 2024, reaching 45.9% for the full year, up 12 percentage points year-over-year. Leveraging our outstanding product portfolio, organizational efficiency and continuous breakthroughs in artificial intelligence, we further solidified our position as the sales champion among Chinese auto brands in the RMB200,000 and above NEV market, taking our full year market share to 15.3%. In the fourth quarter of 2024, we delivered over 158,000 vehicles, setting a new quarterly record. Our full year deliveries exceeded 500,000 units, making us both the first emerging NEV brand and first Chinese premium auto brand to reach this milestone. In addition, each model in our Li L series, including the L6, L7, L8 and L9, have achieved cumulative deliveries of over 200,000 units respectively, showcasing the strong user recognition of our products and our highly efficient and consistent delivery capability. These achievements will not have been possible without the effort and dedication of every team member at Li Auto, the support of our partners and the trust of our users. I would like to express my heartfelt gratitude to them and look forward to reaching new milestones in collaboration. As our business continues to expand, a number of our financial metrics have reached record highs for the quarter. In Q4 2024, total revenues reached RMB44.3 billion, taking full year total revenues to RMB144.5 billion. As of the end of 2024, our cash on hand has reached RMB112.8 billion. Our robust cash generation capabilities and substantial cash reserves provide solid support to our long-term investments in electrification and artificial intelligence, advancing our progress toward our long-term vision. Looking forward, we expect continued growth in 2024 aiming for 88,000 to 93,000 vehicle deliveries in Q1. There is no doubt that intelligence is the theme of the next phase of auto industry's evolution. We continue to invest in R&D and accelerate innovation. Our R&D investments exceeded RMB11 billion in 2024, driving further breakthroughs and growth in our autonomous driving system. In terms of autonomous driving, we solidified our position as a top-tier player in the sector. Our industry pioneering dual system autonomous driving solution combining an end-to-end model with a vision language model sets the trend in the industry with industry-leading pace of iteration and performance. In January, we rolled out AD Max V13, upgrading highway NOA to an end-to-end architecture providing end-to-end capability across both urban and highway driving scenarios. In parallel, we introduced a first-of-its-kind AI reasoning visualization feature for autonomous driving, providing users with a better understanding of how the autonomous driving function works. In February, we rolled out our latest end-to-end and VLM models trained on 10 million video clips for all AD Max users, making us the first automaker in China to deploy large models trained on 10 million video clips. Our autonomous driving system has been evolving at an industry-leading pace, taking only seven months to grow from 1 million to 10 million video clips. In addition, our 10 million video clips AD Max V13 boasts industry-leading performance, which was clearly demonstrated in our recent press reviews that evaluated top-tier autonomous driving systems from global and domestic auto brands. AD Max V13 secured first place in a number of these head-to-head reviews with a significant advantage in terms of number of interventions. Additionally, we have already initiated R&D for our next-generation model base on the Vision Language Action, or VLA, architecture. We plan to launch it alongside our first battery electric SUV Li L8 this year, delivering refreshed autonomous driving experience to our users. Moving on to supercharging network. We're accelerating its deployment in preparation for the launch of BEV models in 2025. In 2024, we built 1,420 supercharging stations at an industry leading pace. We operate the largest highway supercharging network of any auto OEM in China. As of now, we have over 1,900 supercharging stations with over 10,000 charging stalls in operation. Our supercharging networks covers a wide range of regions, boasting rapid charging speed at high uptime rate. And even in winter, Li MEGA can charge up to 500 kilometers in 12 minutes with battery precondition. Even under the heavy load of spring festival holiday, our charging facilities reach an uptime rate of 99.9%. The overall charging experience and efficiency are essential to BEV users. Looking forward, we will continue to accelerate the deployment of our supercharging network, aiming to have 2,500 supercharging stations by the time we launch Li i8, our first battery electric SUV. We plan to expand to 4,000 stations by the end of 2025. Moving on to sales and servicing network, in 2024, the overall quality and sales efficiency of our retail stores have improved substantially. By replacing lower-performing shopping mall stores with sales centers located in major auto parks, our proportion of sale centers has increased from 24% at the end of 2023 to 42% at the end of 2024. Total nation-wide display slots increased from over 2,600 to over 3,700. In terms of same-store sales, taking the newly opened Changzhou Hi-Tech Zone sales center as an example, its same-store sales has reached 175 units per month in just four months since opening. This fully demonstrates the operating efficiency of our new sales centers. As of February 28, 2025, we have 500 retail stores in 150 cities nationwide. Looking ahead to 2025, while we continue to strengthen our offline presence, we will continue to pursue high-quality expansion of our sales network at a reasonable pace, prioritizing operating efficiencies. We're also advancing our overseas expansion as planned. In January 2025, we opened our R&D center in Munich, Germany. This is our first overseas R&D center, marking the first step in our globalization R&D strategy. Additionally, we have established directly-operated servicing centers in three regions, Kazakhstan, Dubai and Uzbekistan. In 2025, we plan to enhance our overseas expansion efforts with a continued focus on markets with high-growth potential. We believe that in the future, we will see an increasing number of Li Auto vehicles on the road in different countries. Looking forward to 2025, we will maintain our product competitiveness with a relentless focus on creating user value. We will further upgrade our existing models and ensure the smooth launch of our new BEV models. In addition, we will continue to embrace intelligent transformation by strengthening our R&D, technological innovation and cash generation capabilities to ensure sustainable long-term development and breakthroughs in this artificial intelligence era. I will now turn the call over to our CFO, Johnny, to walk you through our financial performance. Johnny Tie Li: Thank you, Xiang. Hello, everyone. I will now walk you through some of our fourth quarter 2024 financials. Due to time constraints, I will address financial highlights here and encourage you to refer to our earnings press release for further details. Total revenue in the fourth quarter were RMB44.3 billion or US$6.1 billion, up 6.1% year-over-year and 3.3% quarter-over-quarter. This included RMB42.6 billion or US$5.8 billion from vehicle sales, up 5.6% year-over-year and 3.2% quarter-over-quarter. Both the year-over-year and the sequential increase were primarily attributable to the increase in vehicle deliveries, partially offset by the lower average selling price. The year-over-year ASP decline was mainly due to different product mix, while the sequential ASP change was mainly due to the interest subsidies provided to customers. Cost of sales in the fourth quarter was RMB35.3 billion or US$4.8 billion, up 10.5% year-over-year and 4.9% quarter-over-quarter. Gross profit in the fourth quarter was RMB9 billion or US$1.2 billion, down 8.3% year-over-year and 2.8% quarter-over-quarter. Vehicle margin in the fourth quarter was 19.7% compared with 22.7% in the same period last year and 20.9% in the prior quarter. The year-over-year decrease was mainly due to different product mix. The sequential decrease was mainly due to the loss on purchase commitment and lower average selling price due to interest subsidies provided to customers. Gross margin in the fourth quarter was 20.3% versus 23.5% in the same period last year and 21.5% in the prior quarter. Operating expenses in the fourth quarter were RMB5.3 billion or US$721.6 million, down 22% year-over-year and 9.1% quarter-over-quarter. R&D expenses in the fourth quarter were RMB2.4 billion or US$329.9 million, down 31% year-over-year and 6.9% quarter-over-quarter. The year-over-year decrease was primarily due to the decreased expenses related to product portfolios and technologies and decreased employee compensation. The sequential decrease was primarily due to the decreased employee compensation. SG&A expenses in the fourth quarter were RMB3.1 billion or US$421.5 million, down 5.9% year-over-year and 8.4% quarter-over-quarter. The year-over-year decrease was primarily due to decreased employee compensation and improved operating efficiency. The sequential decrease was primarily due to decreased employee compensation associated with recognition of CEO's performance-based awards in the third quarter of 2024, partially offset by the increased marketing and promotion activities. Income from operations in the fourth quarter was RMB3.7 billion or US$507.4 million, up 22% year-over-year and 7.9% quarter-over-quarter. Operating margin in the fourth quarter was 8.4%, improved from 7.3% in the same period last year and 8% in the prior quarter. Net income in the fourth quarter was RMB3.5 billion or US$484 million, down 38.6% year-over-year and up 25.3% quarter-over-quarter. Diluted net earnings per share attributable to ordinary shares was RMB3.31 or US$0.45 in the fourth quarter versus RMB5.32 in the same period last year and RMB2.66 in the prior quarter. And now, turning to our balance sheet and cash flow. Our cash position remained strong and stood at RMB112.8 billion or US$15.5 billion as of December 31, 2024. Net cash provided by operating activities in the fourth quarter was RMB8.7 billion or US$1.2 billion versus RMB17.3 billion in the same period last year and RMB11 billion in the prior quarter. Free cash flow was RMB6.1 billion or US$830.1 million in the fourth quarter versus RMB14.6 billion in the same period last year and RMB9.1 billion in the prior quarter. As of December 31, 2024, we had a total of 32,248 employees. For more information and details of our 2024 full year financial results, please refer to our earnings press release. And now, for our business outlook. For the first quarter of 2025, the company expects the delivery to be between 88,000 and 93,000 vehicles, representing a year-over-year increase of 9.5% to 15.7%. The company also expects the first quarter total revenue to be between RMB23.4 billion and RMB24.7 billion or US$3.2 billion and US$3.4 billion, representing a year-over-year decrease of 8.7% to 3.5%. This business outlook reflects the company's current and preliminary view on its business situation and market condition, which is subject to change. That concludes our prepared remarks. I will now turn the call over to the operator and start our Q&A session. Thank you. Operator: Thank you. [Operator Instructions] Your first question comes from Paul Gong with UBS. Paul Gong: [Foreign Language] So, I will translate my questions. The first one is regarding the BEV launch. Can you remind us the overall the latest launch and timing of the new models and also the highlights of your BEV models you could share with us? The second is regarding the AI strategy. We noticed management is spending more focus. It's increasingly more focused on the AI. Can you please share us with the latest development strategy? Thank you. Xiang Li: [Foreign Language] [Interpreted] We're planning to launch two pure electric SUVs this year. The first one being the VL -- Li i8, which will be launched in July. And the second one, Li i6 will also be launched in the second half of this year. The two cars will be launched -- part of the reason we launch it in the second half this year is partly to catch the sales momentum in typically the sales season of Q3 and Q4 and also partly to save enough orders to support deliveries for next Q1 and Q2. We tend not to release too much information before official product release because we think is holistic -- it means, we consider holistically with users buying experience, delivery experience. So, please, stay tuned for our official product release. [Foreign Language] [Interpreted] First of all, our overall view is that at this stage, the most important thing for artificial intelligence is to grow capabilities, improved capabilities. And I'll provide one example using autonomous driving. Under rule-based system, it's very analogous to teaching an insect or primitive creature to drive. And later when we move on to end-to-end VLM, it's comparable to a monkey learning drive with a human on the side. It is an improvement versus previous rule-based system, but it's still nothing comparable to a professional driver. And this is determined by the fundamental architecture of the models because VLM and end-to-end are two separate brain systems, and either of them are strong enough. So, the real question for us is how can we allow a big model to operate just like human beings, like make it understand the physical world, understand the software world, which includes navigation and a bunch of other things, as well as the intentions of the passengers. So, we need to build a model that combines all three categories and build them into one foundational model, which includes understanding of physical space using 3D vision and understanding of a language space using LLM and understanding the physical world using end-to-end. Only if we combine these three into one model, can we understand the world just like human beings and drive like human beings. And this is our overall understanding of breakthroughs in artificial intelligence, and we don't tend to make specific plans in this area. Thanks. Operator: Your next question comes from Tim Hsiao with Morgan Stanley. Tim Hsiao: [Foreign Language] So, my first question is about sales growth. How should we think about Li Auto's volume sales growth this year against the backdrop of tough competition? When would you expect Li Auto's market shares could to be returned to the previous peak level or even achieve record level considering the new [phase of] (ph) L series and together with EV launches in the second half? That's my first question. Xiang Li: [Foreign Language] [Interpreted] Our overall strategy for sales growth for this year consists of several aspects. One is product upgrades, expansion of sales network as well as reinforced marketing practices and expansion overseas. First of all, on the product front, we'll be launching the AD upgraded version of L Series and MEGA series this year, as well as our new -- completely new BEV electric SUV model. The new pure electric SUV will help us tap into a bigger market. In the meantime, our upgraded autonomous driving system, V13 trained on 10,000 -- 10 million video clips have also improved its capability significantly, which also forms a solid foundation for our sales growth. On the sales network front, we currently operate 502 retail stores. And on top of that, we have started to work with partners -- after-sales partners to increase coverage in four -- Tier 4 and Tier 5 cities. Apart from the official stores, we have -- apart from these permanent stores, we have also opened over 200 retail stalls and pop-up stores, 60 pop-up stores in the shopping malls to open up our customer acquisition channel. On the marketing front, we have introduced professional live-streaming sales representatives to help us open up our customer acquisition channel. In the meantime, with our dedicated DCC call center personnel, we can also increase conversion rate of these increased new customers acquired through those above channels. On the overseas front, our overseas expansion plan is proceeding as planned, and we have made significant progress in Middle Asia, in Asia Pacific and various other markets. We will continue to increase our investments in Latin America, Middle East and European markets. We have also made progress in working with authorized dealers overseas. And through a group of high-quality and experienced authorized dealers, we are confident to achieve a major growth overseas this year. And with -- overall with sales improvement, with technology improvements and nimble marketing strategies, as well as expansion of sales networks, I'm pretty confident about overall sales growth this year. Tim Hsiao: [Foreign Language] So, my second question is also related to AI, because Li Auto has been investing in AI aggressively over the past few quarters. What will be the scale of Li Auto's AI-related investment in the following years? And in addition to two key applications, one is Mind GPT empowered Li Xiang Tong Xue BEV, and the other one is the [autonomous driving] (ph), will there be any new applications for or beyond [indiscernible] in the following quarters? That's my second question. Thank you. Xiang Li: [Foreign Language] [Interpreted] Overall, investments in AI-related initiatives will see substantial growth in the next few years, but will mainly be funded by our cash from operations. [Foreign Language] [Interpreted] So, when we think about this overall positioning of what we need to do in the AI period, I think the first fundamental question is our positioning because different positioning requires different types of capability and provide different types of user value. So, let's take an example. After 1975 in the PC world, there emerged as Mac making -- Apple making Macintosh and there was Windows making DOS and -- sorry, there was Microsoft making DOS and Windows and there were also device manufacturing. And similarly, in the mobile age, there was iPhone, and there was Android offering device OS and open platform and et cetera. Each one of these companies achieved great market success, but they chose different positioning and they used different models and they had to make different trade-offs. For example, Apple chose a less open approach and provided better user experience, whereas Android had a more open approach and -- but the user experience may not be perfect at all times. So, coming back to Li Auto, which one of these positions should we choose? First of all, we think in the AGI world, our positioning is to become a hardware or device manufacturing -- manufacturer. But different from PC or mobile world, device manufacturer for AGI world requires a different set of capabilities and experience. So, in general, the device we make in the AGI world or the overall AGI device is broadly speaking, a robot. Therefore, it needs to have the cognitive, the execution, the feedback, the reasoning, and the decision-making capabilities. And that, of course, includes software AI functionalities OS on the software side, and on the hardware side includes not only the physical movement pieces, but also the computing power. And on top of that, it also requires operation, and we need a robust system to operate these devices in the AGI world. We can't simply rely on IT software, probably we need to use something more like a world model. So, how do we manage these silicon-based devices is also going to change. And at the same time, how we manage carbon-based human beings are also going to be -- also going to change, and they're going to be managed differently. So, in the AGI world, to sum up, we want to become a device maker providing with the above capabilities. The second thing we need to think about is user scenario. And from this point, I can see three types of robots in general. The first is more closely L4 vehicle or we call space robot, it can navigate itself in open space with its own cognition and decision-making execution powers. The second type is the type of robot that enhances human capabilities. And the third one, which I think is the most difficult one operates indoors. It has the shape of a human being, and it can navigate itself. So, these are the three different robots that I see in the AGI world and they combine pretty much cover all aspects of human life. And we want to be a maker of all these devices so we can provide services to our users in different scenarios. It is comparable, for example, to Apple, which provides the Macintosh, the iPhone, the iPad, and iWatch, which covers different aspects of users' life. Here's our latest thinking for the next three to five years and probably even longer and we'll iterate over time. Thank you. Operator: Your next question comes from Tina Hou with Goldman Sachs. Tina Hou: [Foreign Language] Thanks management for your time. So, my first question is in terms of the 2026 outlook in terms of the, I think, overall auto industry and EV industry, your volume outlook as well as competition intensity. And then, also this year, the competition is mainly focused on autopilot. So, next year, do you see a continuation or change in that? And then, the second question is regarding autonomous driving itself. So, in the future, in the world of L3 and L4 becoming more like prevalent, does management think there is a monetization method for these autonomous driving software? Thank you. Xiang Li: [Foreign Language] [Interpreted] First of all, on industry and competition, we believe that the penetration rate of NEV will continue to increase in 2026, but market competition will transition from competing for growth to competing for market share. Brand will play in a very important role in users' purchase decisions and users tend to choose brands that are well-known and have good word-of-mouth. In different price segments, the top brands are going to increase market share through their advantages in product, technology, brand and overall service experience. In other words, the market concentration is going to continue to increase. Another trend that we see is many car brands will continue to improve and accelerate their development of advanced autonomous driving as the competition here is going to be more intense. On the technology front, technologies like drive-by-wire, which includes riding and -- ride and handling experience of technologies like AI cockpit, which includes user interaction experience will also become a focus of competition in 2026 and beyond. And for Li Auto, our strategy is to continue to complete our product portfolio with many cars -- several cars launching in 2026, we will complete our full coverage of the range-extended at pure electric product matrix, covering different price ranges at different segments and to cater to more users -- as many users as possible. In the meantime, we'll increase our investments in autonomous driving and other artificial intelligence technologies to maintain our lead in products and overall product experience. We will also expand our expansion of our supercharging network and increase coverage as well as service experience and to fully eradicate range anxiety for our users. Apart from the domestic market, we will work with different types of market partners through different methods to accelerate our growth in overseas sales and service networks. Thank you. [Foreign Language] [Interpreted] On L3 and L4, so coming back to the current stage, including L2 and L3, they are essentially machines assisting humans to drive, they're really taught. Different -- there may be different approaches to L2 and L3, but the main difference is in the range of usage, the coverage of usage and also the availability of different features. But fundamentally, it's really still the human driver taking control of the car. There is no fundamental change in the relationship between human and the car. But as we evolve to L4, the car will become an agent or we call a driver agent. So, there's going to be a fundamental change between the human and car relationship. The autonomous driving system will evolve from just being a tool to become an actual agent that can replace human beings in driving. It's comparable to hiring a professional driver. In this scenario, we believe that users will be willingness -- will be willing to pay for this kind of service. And on top of that, when users are relieved from the burden of driving, cars will become a robot or we call space robot that can navigate the physical world in the AI age. And in this era, the in-car information -- in-car software and experience and services will have greater value and it may lead to new business models, which gives us more room for imagination. So, with the huge potential of L4 era, our team is already very actively exploring and our goal is to capture this very big opportunity when the time of L4 comes. Thank you. Operator: Your next question comes from Ben Wang with Deutsche Bank. Ben Wang: [Foreign Language] My first question is about the first quarter gross margin guidance. It has been noticed, some of the positive side from the component pricing deduction. We also noticed that you provide some cash discount. So, can you provide first quarter gross margin guidance? Thank you. Johnny Tie Li: Hi, good morning. This is Li Tie. The first quarter is the low season due to Chinese New Year and also we have some sales promotion after Chinese New Year. So, all that conclude together, we expect our Q1 vehicle gross margin to be around 19%. Ben Wang: [Foreign Language] My second question is about media reports that the Chairman actually were no longer take care of the auto business and the focus was shifting to the AI R&D. Can I -- my question is that what's the change in the management allocation and how to balance the vehicle business and the upcoming AI business? Thank you. Unidentified Company Representative: [Foreign Language] [Interpreted] Mr. Li is still the CEO of the company and he still oversees the different departments related to the car business, including vehicle lines, including product department, branding, and strategy departments. This remains unchanged from 2024. And we have allocated new responsibility under our VLM and [PVST] (ph) framework, assigned new person in charge and we remain devoted to relying on efficient collaboration across the company to support our success in the long term. Operator: Your next question comes from Yingbo Xu with CITIC Securities. Yingbo Xu: [Foreign Language] So, I have two questions. The first one is how we see MEGA's market performance and what's our expectation or plan for MEGA in future? And the second question is, what's our long-term plan for internationalization? Thank you. Xiang Li: [Foreign Language] [Interpreted] Li MEGA is a luxury pure-electric MPV priced at over RMB500,000, and it has been the number two in sales in this segment for many consecutive months, only second to the Toyota Alphard. This year, we hope that Li MEGA will remain top three in this segment and with expected annual sales between 10,000 and 15,000. On top of that, Li MEGA is one of the cars with the highest net promoter score among our product portfolio. In periods like the Chinese Spring Festival, Li MEGA has been widely praised for its chassis, seat comfort, NVH, smart cockpit, autonomous driving and highway 5C charging experience that has significantly exceeded our user expectation, which further led to an increase in MEGA NPS after the Spring Festival, which speaks to user satisfaction with the product and services and their willingness to recommend the card to people around them. In the meantime, we are -- the number of our directly-operated 5C charging stations has exceeded 1,900. So, MEGA users, whether they're driving on highways or driving in cities, they have easy access to 5C charging experience, which eliminates any anxiety with charging on long road trips. In the meantime, we're also accelerating our rollout of more 5C supercharging stations, and as planned, we will have over 2,000 stations by the end of the first quarter connecting the five transfers and -- the nine transfers and nine longitudinal highway routes in China. By the time we launch Li i8 this year, we expect to have over 2,500 stations of supercharging stations. And in April this year, we plan to cover the entire distance of the G318, a well-known Chinese roadway so that our MEGA users can drive their cars on G318. And we also have plans to open up 50 travel routes or road trip routes to provide easy charging experience for our users. By the end of this year, we will be -- our charging stations will be covering over 67,000 kilometers of highway and over 10,000 of inter-province highways, totaling over 77,000 kilometers. And we have already built 483 charging stations across the four major economic zones in China with an average interval of 99 kilometers. By the end of this year, we will be covering all of our four economic zones with highway supercharging stations. As we continue to build out our supercharging station and as we roll out Li i8 and other pure electric models with the scale -- economy of scale, we are very confident in the sales volume of Li MEGA. [Foreign Language] [Interpreted] In 2025, we are very aligned that overseas expansion is going to be one of the core strategies of this company. So, we will be devoted to expanding the overseas market and building capabilities across branding, marketing, channel and aftersales as well as organization and recruiting. At the beginning of this year, we have or had already established an independent overseas expansion department and have moved many experienced personnel from the company. On the market front, we will be building on this luxury brand image that we have already established in Middle Asia and in other markets to expand our market share. In the meantime, in the past year, we have already built service centers and after-sales centers in Kazakhstan, Uzbekistan and UAE. At the same time, we'll also provide original spare parts and tech support to qualified after-sales partners, so that our overseas customers can enjoy the same level of service that we provide to our domestic customers. In the meantime, we also expanded our market in Middle East, Latin America, and Asia-Pacific. We've been working with high-quality local partners to expand our overseas market. We'll also be picking a small number of dealers as our local partners to expand the market together. We'll also expand our marketing and building out a very complete after-sales market -- after-sales network. 2025 is our first year of officially launching into the overall overseas market, and we will be building on capabilities that we have built in the domestic market, and we're confident to have made significant progress in the overseas market this year. Operator: As we are reaching the end of our conference call now, I'd like to turn the call back over to the company for closing remarks. Ms. Janet Chang, please go ahead. Janet Chang: Thank you once again for joining us today. If you have further questions, please feel free to contact Li Auto's Investor Relations team. That's all for today. Thank you, and have a nice weekend.
Li Auto Inc. (NASDAQ:LI) Earnings Report Highlights
- Li Auto reported earnings per share of $0.33, surpassing the estimated $0.16.
- The company's revenue was $3.53 billion, below the expected $4.83 billion.
- Li Auto delivered 92,864 vehicles in the first quarter, exceeding analysts' forecasts.
Li Auto Inc. (NASDAQ:LI) is a leading Chinese electric vehicle manufacturer known for its innovative approach to the EV market. The company focuses on producing smart electric SUVs and has been gaining traction in the competitive Chinese EV landscape. Li Auto competes with other major players like NIO and XPeng, striving to capture a significant share of the growing EV market.
On May 29, 2025, Li Auto reported earnings per share of $0.33, exceeding the estimated $0.16. However, the company generated revenue of approximately $3.53 billion, falling short of the expected $4.83 billion. This discrepancy highlights the challenges Li Auto faces in meeting revenue expectations despite strong earnings performance.
Li Auto's U.S.-listed shares experienced a decline in premarket trading after the company reported first-quarter profits and projections that did not meet analysts' expectations. The company announced adjusted earnings per American depositary share of 0.96 yuan, equivalent to $0.13, on a revenue of 25.93 billion yuan, or $3.61 billion. Analysts had anticipated earnings of 1.03 yuan and revenue of 25.28 billion yuan.
Despite the earnings miss, Li Auto delivered 92,864 vehicles in the first quarter, surpassing the analysts' forecast of 91,723 units. CFO Tie Li emphasized the company's ability to navigate dynamic market conditions while maintaining strong profitability. Looking ahead, Li Auto expects to deliver between 123,000 and 128,000 vehicles in the second quarter, with revenue projections between 32.5 billion yuan and 33.8 billion yuan, both below Visible Alpha's forecasts.
Li Auto's financial metrics provide insight into its market valuation. The company has a price-to-earnings (P/E) ratio of approximately 13.77, indicating how the market values its earnings. Its price-to-sales ratio stands at about 0.72, suggesting a relatively low valuation compared to its sales. The enterprise value to sales ratio is around 0.38, reflecting the company's total valuation in relation to its revenue.
Li Auto Inc. (NASDAQ:LI) - A Beacon in China's Electric Vehicle Market
- Stable Analyst Consensus: The consensus price target for Li Auto Inc. (NASDAQ:LI) has increased modestly, indicating a positive outlook on the company's growth prospects.
- Recent Delivery Dip: A seasonal effect led to a 12% decrease in vehicle deliveries in February, but the outlook remains positive with expectations of stabilization.
- Strong Market Position: Despite recent delivery challenges, Li Auto's profitability, competitive pricing, and superior vehicle margins keep it in a strong position within the electric vehicle sector.
Li Auto Inc. (NASDAQ:LI) is a key player in China's energy vehicle market, specializing in premium smart electric vehicles. The company designs, develops, manufactures, and sells a variety of vehicles, including MPVs and SUVs. Li Auto also offers sales, after-sales management, technology development, and corporate management services. Their products are distributed through both online and offline channels, making them accessible to a wide range of consumers.
The consensus price target for Li Auto has shown a modest increase over the past year. Last month and last quarter, the average consensus price target was $38.5, reflecting a stable outlook from analysts. This stability suggests confidence in Li Auto's performance and potential. The increase from last year's target of $35.92 indicates a positive sentiment towards the company's growth prospects in the electric vehicle sector.
In February, Li Auto faced a decline in delivery results, with only 26,263 electric vehicles delivered, a 12% decrease from the previous month. This drop is attributed to seasonal effects, which are expected to stabilize in March. Despite this setback, Li Auto maintains a strong buy rating due to its profitability, competitive price-to-revenue ratio, and superior vehicle margins compared to competitors like NIO and XPeng.
Analyst Tim Hsiao from Morgan Stanley has set a price target of $49 for Li Auto, highlighting the company's strong market position. Investors should consider factors such as earnings reports, market trends, and company announcements, as these can influence price targets. Keeping an eye on these elements will help investors understand potential movements in Li Auto's stock price.
Li Auto Inc. (NASDAQ:LI) - A Beacon in China's Electric Vehicle Market
- Stable Analyst Consensus: The consensus price target for Li Auto Inc. (NASDAQ:LI) has increased modestly, indicating a positive outlook on the company's growth prospects.
- Recent Delivery Dip: A seasonal effect led to a 12% decrease in vehicle deliveries in February, but the outlook remains positive with expectations of stabilization.
- Strong Market Position: Despite recent delivery challenges, Li Auto's profitability, competitive pricing, and superior vehicle margins keep it in a strong position within the electric vehicle sector.
Li Auto Inc. (NASDAQ:LI) is a key player in China's energy vehicle market, specializing in premium smart electric vehicles. The company designs, develops, manufactures, and sells a variety of vehicles, including MPVs and SUVs. Li Auto also offers sales, after-sales management, technology development, and corporate management services. Their products are distributed through both online and offline channels, making them accessible to a wide range of consumers.
The consensus price target for Li Auto has shown a modest increase over the past year. Last month and last quarter, the average consensus price target was $38.5, reflecting a stable outlook from analysts. This stability suggests confidence in Li Auto's performance and potential. The increase from last year's target of $35.92 indicates a positive sentiment towards the company's growth prospects in the electric vehicle sector.
In February, Li Auto faced a decline in delivery results, with only 26,263 electric vehicles delivered, a 12% decrease from the previous month. This drop is attributed to seasonal effects, which are expected to stabilize in March. Despite this setback, Li Auto maintains a strong buy rating due to its profitability, competitive price-to-revenue ratio, and superior vehicle margins compared to competitors like NIO and XPeng.
Analyst Tim Hsiao from Morgan Stanley has set a price target of $49 for Li Auto, highlighting the company's strong market position. Investors should consider factors such as earnings reports, market trends, and company announcements, as these can influence price targets. Keeping an eye on these elements will help investors understand potential movements in Li Auto's stock price.
Li Auto Inc. Earnings Report Preview: Key Financials and Legal Challenges Ahead
- Li Auto Inc. is set to release its earnings report on May 20, 2024, with an expected EPS of $0.35 and revenue estimates around $3.85 billion.
- The company faces a securities class action lawsuit, adding a layer of investor scrutiny ahead of the earnings announcement.
- Financial metrics reveal a mixed picture, with a P/E ratio of 16.35 and a P/S ratio of 1.42, indicating moderate investor expectations and valuation concerns.
On Monday, May 20, 2024, before the market opens, NASDAQ:LI is scheduled to release their earnings report for the quarter. Wall Street estimates suggest earnings per share (EPS) of $0.35. The revenue for the period is estimated to be approximately $3.85 billion. This upcoming earnings report is particularly significant for Li Auto Inc., a company that has made its mark in the electric vehicle (EV) industry by focusing on smart, energy-efficient automobiles. As competition in the EV market intensifies, with major players like Tesla and NIO, the performance of LI in this quarter is crucial for maintaining its position and investor confidence.
Li Auto Inc. is currently navigating through challenging waters as it faces a securities class action lawsuit, as announced by the law firm Kessler Topaz Meltzer & Check, LLP. This lawsuit, filed in the United States District Court for the Eastern District of New York, alleges violations of federal securities laws through omissions and fraudulent misrepresentations related to the company's business operations and prospects. This legal challenge comes at a time when investor scrutiny is high and the financial health of the company, as indicated by its upcoming earnings report, is under the spotlight.
The financial metrics of Li Auto provide a mixed picture of the company's current standing. With a price-to-earnings (P/E) ratio of approximately 16.35, investors seem to have a moderate expectation of the company's future earnings growth. This is complemented by a price-to-sales (P/S) ratio of about 1.42, suggesting that the market values each dollar of LI's sales at a premium. However, the enterprise value to sales (EV/Sales) ratio of roughly 0.80 indicates that the market values the company at less than its sales value, which could be a point of concern for investors looking at the company's growth prospects.
Moreover, the enterprise value to operating cash flow (EV/OCF) ratio is significantly high at approximately 1942.43, highlighting the company's valuation in relation to its operating cash flow. This could indicate that the market expects future growth or it could signal overvaluation, depending on the perspective of the investor. The earnings yield of about 6.12% offers an insight into profitability from an investor's perspective, suggesting a reasonable return on investment. The debt-to-equity (D/E) ratio of around 0.23 shows a moderate level of debt relative to equity, indicating that the company is not overly leveraged. Lastly, the current ratio of approximately 1.57 suggests that LI is capable of covering its short-term liabilities with its short-term assets, which is a positive sign for liquidity.
As Li Auto Inc. prepares to release its quarterly earnings report, investors and analysts will be keenly watching how these financial metrics translate into actual performance, especially in light of the ongoing legal challenges. The outcome of this earnings report could significantly influence investor sentiment and the company's market position amidst the competitive and rapidly evolving electric vehicle industry.
Li Auto Shares Drop 8% Following Delivery Guidance Cut
Li Auto (NASDAQ:LI) shares saw a downturn of over 8% in pre-market today following the company's revised guidance for its Q1 vehicle deliveries. The electric carmaker adjusted its delivery expectations to between 76,000 and 78,000 vehicles, a significant decrease from its previously estimated range of 100,000 to 103,000 units.
This new forecast notably falls short of the analyst predictions, which were around 107,834 vehicles. CEO Xiang Li commented on the challenges faced in March, explaining that the company's operational approach to its Li MEGA model was too ambitious, treating it as if it were in a more advanced phase of scaling than it actually was.
Citi Expresses Optimism on Li Auto Shares
Citi initiated a "30-day positive catalyst watch” on Li Auto (NASDAQ:LI) while maintaining a Buy rating and a $54.30 price target on the shares.
The bank is optimistic about LI's recent strong shipment and potential sector recovery into July 2023. It highlighted four key potentially positive catalysts to watch over the next 30 days: positive insurance numbers, signs of broader sector recovery, improvements in margins and cash flow, and new product launches.
Citi expects further shipment acceleration, continued sector growth, increased margins and cash flow, and the introduction of both BEV and EREV versions of MPVs by Li Auto.
Citi Expresses Optimism on Li Auto Shares
Citi initiated a "30-day positive catalyst watch” on Li Auto (NASDAQ:LI) while maintaining a Buy rating and a $54.30 price target on the shares.
The bank is optimistic about LI's recent strong shipment and potential sector recovery into July 2023. It highlighted four key potentially positive catalysts to watch over the next 30 days: positive insurance numbers, signs of broader sector recovery, improvements in margins and cash flow, and new product launches.
Citi expects further shipment acceleration, continued sector growth, increased margins and cash flow, and the introduction of both BEV and EREV versions of MPVs by Li Auto.
