On the evening of July 1, Ideal Auto announced sales volume for June '24: the company sold 47,700 vehicles in June, +46.7%/+36.4%; cumulative sales of 189,000 vehicles over 24 years, cumulative +35.8% YoY; Q2 sold 108,600 vehicles, +25.5%/+35.1% YoY.

1. L6 drove overall sales volume in June to exceed expectations, and there are currently plenty of orders in hand.

L6 delivery exceeded expectations: L6 climbed smoothly, and L6 was delivered centrally this month, driving the company's sales volume to exceed expectations. Based on weekly sales, we estimate that the L6 accounts for 52% of the company's sales. We expect to deliver about 25,000 units this month. Previously, the market expected to sell 20,000 units per month.

There are plenty of L6 orders in hand: We estimate that the cumulative number of locked orders is close to 80,000 units, with new orders of about 20,000 units per month.

2. Looking ahead to Q3, focus on whether monthly sales can hit the 50,000 mark.

We believe that the company has the potential to impact 50,000 monthly sales: 1) The company's products and sales strategy have been drastically adjusted in Q2, and resources have been further concentrated on L6789; 2) the competitive pattern in the market segment is still good, and competitors are still mainly in the Huawei market.

As the OEM with the highest sales rate in the world, we believe that the most ideal moat is efficient management and lean strategy. The company entered the new car cycle in 24-25, and 5 new high-voltage pure electric+extended range models will be released, which is promising for a long time. We temporarily maintain the profit forecast of the company's 24/25/26 net profit of 133.2/211.8/26.20 billion yuan, corresponding to 18.8/11.8/9.6 times PE, and maintain the “buy” rating.

Competition in the industry intensified, and market demand fell short of expectations.