24Q1 net profit declined slightly, and the L6 model entered the batch delivery cycle, maintaining the “buy” rating. The 24Q1 company's revenue was 25.6 billion yuan, +36% year over year; 24Q1 net profit was 600 million yuan, -37% year over year, and 24Q1 adjusted net profit of 1.3 billion yuan. The company expects to deliver 105-110,000 units in 24Q2, +21% ~ 27% year-on-year; total revenue of 299-31.4 billion yuan, +4-9% year-on-year. L6 is about to enter the batch delivery cycle, the organizational structure continues to be iterated, and sales are expected to pick up. We expect the company's 24-26 sales volume to be 49/79/1.04 million vehicles, with corresponding revenue of 1419.2169/275.2 billion yuan, and net profit of 76/13/18.9 billion yuan, respectively. Tesla, Geely Auto, and BYD were selected as comparable companies, and adjusted the company's target price to HK$134.94 (previous value HK$170.14), giving the company 25 years of 20xPE, an average of 2025E 23xPE, and a discounted 3xPE pure electric model launch pace to maintain a “buy” rating.
Q1 gross margin was steady year-on-year, with increased R&D and channel expansion, causing the cost side to put pressure on the 24Q1 company to deliver 80,000 vehicles, +53% over the same period, and was the top NEV sales champion of over 300,000 yuan for 18 consecutive months. The company's 24Q1 gross profit margin was 20.6%, +0.2pct year-on-year. , month-on-month ratio - 2.8pct. The main reason is that the average selling price was reduced due to changes in the 24Q1 pricing strategy, and 23Q4 surged back part of the warranty reserve based on updated future warranty cost estimates. The company's 24Q1 adjusted net profit of 1.3 billion yuan, achieving six consecutive quarters of profit. On the cost side, 24Q1 R&D expenses/sales, general and administrative expenses were $3/30 billion, respectively, or +65%/+81% compared to the same period last year. The sharp year-on-year increase on the cost side was mainly due to increased employee remuneration, increased research and development of intelligent technology, and expansion of sales channels.
The L6 is expected to have a production capacity of 20,000 in June, and the layout of overcharging stations will be accelerated. It is expected that the new pure electric vehicle will be released on May 15, and the 10,000 mass-produced Ideal L6 will officially go offline. As of May 15, the cumulative number of L6 locked orders reached 34,000. The company's production capacity is continuing to climb, and is expected to exceed 20,000 units in June. In terms of the layout of overcharging stations, as of May 19, 404 ideal overcharging stations and 1,770 charging piles have been launched nationwide.
It has a layout of 22/126 provinces and cities, connecting 4 national highways, including the G2 Beijing-Shanghai Expressway and the G4 Beijing-Hong Kong-Macau Expressway. The company will firmly invest and speed up the layout. It is expected that by the end of '24, more than 2,000 ideal supercharging stations will be put into use, improving the charging experience of existing models while providing a solid foundation guarantee for the launch of high-voltage pure electric models in '25.
OTA 5.2 launched, AD Pro 3.0 achieved high-speed NOA zero takeover in May, OTA 5.2 launched push, added 19 features, optimized 23 experiences, and upgraded AD Pro 3.0 for intelligent driving and AD Max 3.0 for intelligent driving. AD Pro 3.0, a smart driving solution based on the Horizon Journey 5 chip's first mass-produced BEV model architecture, can achieve zero high-speed NOA 1000-kilometer level takeover, add detour capability for cone barrels and anti-collision barrels, and make the driving experience smoother. AD Max 3.0's active safety capabilities have been upgraded in all aspects. It is optimized for up to 8 high-frequency high-risk scenarios, such as a straight encounter with a tricycle crossing at an intersection, to identify and intervene in a timely manner in advance to avoid or mitigate the risk of collision. We believe that by increasing investment in intelligent technology research and development, the company will continue to enhance product strength and brand power, and drive high sales growth.
Risk warning: Consumer demand falls short of expectations, supply chain shortages, company product releases and orders fall short of expectations.