Key points of the announcement: Due to recent order sales falling short of expectations, the company lowered the 24Q1 delivery guidelines from 100,000 to 102,000 units to 76,800 units. Considering that the company's cumulative deliveries from January to February reached 51,416 units, the estimated delivery of 236 to 26,600 units in March. The aim of this reduction in sales targets is to reduce the focus on sales volume and competition and return to healthy growth.
Reduce growth expectations and return to rational development, correct errors and reflect in a timely manner to guarantee user value. Reviewing market feedback after the launch of Ideal MEGA and all L series models in March, the company believes that: 1) MEGA sales did not meet expectations mainly due to miscalculation of the rhythm. As the first ideal pure electric model, MEGA's commercial verification period from 0 to 1 was ignored, and directly defined as a period of rapid development from 1 to 10. Therefore, subsequent companies will return to user value, focus on cities with strong capacity to consume high-end pure electricity, and develop channel construction, and then gradually unfold; 2) Currently, excessive focus on sales volume and market competition has led to a decline in operating efficiency and user recognition. The future will lower sales expectations, focus on users rather than competition, and improve operational efficiency.
We believe that the expected behavior of this correction is another reflection of our excellent error-correction ability and ability to grasp the rhythm. Currently, the passenger car market is fiercely competitive, and the launch of the hot model has higher comprehensive quality requirements in various areas such as market understanding, product promotion, channel operation, and supply chain management. The rise in the company's share in 2023 is mainly due to the strong L Series operating potential and continuous strategy adjustment according to the competitive environment; the resumption and timely strategic adjustment after MEGA's phased loss is a key turning point for the company to re-rationalize its business philosophy and return to the original intention of “user value based”.
Competition in the automotive industry is not only a rapid increase in short-term sales share, but also a simultaneous increase in user recognition, brand value, and technical strength. Only by mastering the pace of development can it be sustainable for a long time.
Profit forecast and investment rating: The company's L series facelift product strength has improved, and the sales base is steady.
Considering that the company adjusted its 2024 business strategy and lowered its sales target, we lowered the company's net profit forecast for 2024-2025, from 247/43.8 billion yuan to 143/24.9 billion yuan, corresponding EPS of 2023-2025 to 5.5/6.8/11.8 yuan, and the corresponding 2023-2025 PE valuation is 22/18/10 times, respectively. Considering that the company's 24Q2 and 24H2 new car cycles are still strong, we maintain a “buy” rating.
Risk warning: The sales volume of the company's new models fell short of expectations, and the price war in the passenger car industry exceeded expectations; the introduction of industry stimulus policies fell short of expectations.