Incident: The company issued a sales announcement for December 2023. The total sales volume of the company was 18,600 vehicles, up 119 percent year on year, continuing the three-digit increase over the past three months. The company sold a total of 144,200 vehicles for the full year of 2023, an increase of 29% over the previous year.
Global self-research to achieve a cost-leading strategy: The company always adheres to global self-research on core technology, and is currently the only smart electric vehicle company with global self-development and self-manufacturing capabilities and the highest degree of vertical integration among the new Chinese car builders. At present, Zero Sports has achieved self-development and production of technologies such as vehicle architectures, electronic and electrical architectures, batteries, electric drives, smart cockpits, and smart driving systems. Under the LEAP 3.0 architecture, Zero Sports Auto's self-developed components will account for 70% of the vehicle cost, and the generalization rate of the architecture will reach 88%, thus effectively reducing costs and increasing efficiency.
Complementary advantages with Stellantis open up the global market: The company has advanced global self-developed technology and a highly cost-effective electric vehicle ecosystem, which will complement Stellantis Group's extensive sales channels and strong brand influence. On December 5, 2023, Chairman Zhu Jiangming proposed at the “Zhejiang Business” annual meeting that the company will establish a joint venture with Stellantis Group to achieve the zero-sports car's asset-light overseas plan. Sales of export models are expected to begin in the third quarter of 2024. The company expects to launch 5 global products in 2024-2025, which will be sold simultaneously in Europe, Asia Pacific, the Middle East, America, etc., to provide an intelligent travel experience for global car consumers.
Investment advice: We expect the company to achieve net profit attributable to mother of -49.66/- 24.16/2,411 billion yuan in 2023-2025, corresponding PE of -6.95/-14.28/14.31 times, respectively, to maintain an “increase in holdings” rating.
Risk warning: Product sales fell short of expectations, market competition intensified, and overseas travel progress fell short of expectations.