The company's recent situation
The company held a summer press conference on intelligent driving1 to review in detail the current progress of the NOA technology and release a new autonomous driving technology architecture based on end-to-end, VLM visual language and world models.
reviews
2Q deliveries exceeded expectations, and the L6 model performed well. The company announced the delivery of 47,774 models in June, +36% compared to the previous quarter; a total of 108,581 vehicles were delivered in the second quarter, which exceeded the previous guideline of 0.105-0.11 million vehicles. Since the L6 model was delivered, it reached 2,381/12,965 units in April-May, respectively, and the delivery surpassed 0.02 million units in June. Excellent product strength has driven the company to successfully enter the 0.2-0.3 million yuan price range. Looking ahead to 2Q results, we believe that the scale effect is expected to be reflected, but considering the increase in L6's sales share, gross margin side or relative pressure, 2Q company personnel adjustments, etc., or one-time expenses, etc., it is recommended to keep conservative expectations; we expect that a strong recovery in profit will still have to wait for 2H24 sales to rise further and operational efficiency to improve.
The NOA test performed brilliantly, with a smart driving range of over 1.9 billion kilometers. The speed and experience of implementation of the company's advanced smart driving features is leading in the industry. Looking back, the company began the domestic NOA 1000 person experience test on May 10, expanded the test scale to 10,000 people on June 17, and officially launched the unlimited experience on June 28. Currently, the smart driving mileage exceeds 1.9 billion kilometers. At the press conference, the company revealed that it plans to officially launch the no-image NOA function in July to officially promote AD Max users (covering a total of 0.24 million users). At the press conference, the company revealed that the new features can achieve capabilities such as no prior information, excellent detour ability, ability to exceed line-of-sight, and decimeter-level operation. In addition, the company plans to OTA a full range of low-speed AEB (automatic emergency braking) and fully automatic AES (automatic emergency steering) functions within July to further guarantee the safe driving experience of users.
The new dual-system architecture combines speed and speed to improve complex scene processing capabilities. The company officially introduced an end-to-end +VLM (visual language model) supervised autonomous driving system. From a technical perspective, the end-to-end model is responsible for the quick judgment of daily driving information, while the VLM model is used to process complex scenarios and is good at slow thinking and logical deduction. Furthermore, in the cloud, reconstruction+generative world models are used to verify dual-system training. We think the highlights of the model are: 1) From the perception+NPN (prior information) architecture, to the One Model end-to-end model, information transmission, inference calculation, and model iteration are more efficient, increasing the upper limit of the model and making driving behavior more personable; 2) The VLM model has strong logical thinking ability to understand complex road conditions, navigation maps, and traffic rules to cope with difficult unknown scenarios. The company plans to start early user testing of the new technical architecture features in July.
Profit forecasting and valuation
Stay ahead of the industry and maintain the 2024/25 nonprofit deduction forecast. Currently, US stocks and Hong Kong stocks correspond to 15x2025E minus non-P/E, maintain the target price of US/Hong Kong stocks at HK$33/HK$130, corresponding to 20x non-GAAP P/E in 2025, with upside of 61% and 64%, respectively.
risks
Pure electric models fall short of expectations; intelligent driving falls short of expectations; market competition intensifies.