The company's recent situation
The company held the MONA M03 new car launch conference on August 27, Beijing time. Starting with the M03 launch, the company officially ushered in a new product cycle. We believe that scale effects and technical cost reduction are expected to be accelerated in 2H24. AI empowers smart driving experiences to accelerate iteration, and usher in better investment opportunities.
reviews
Intelligence is accelerating, the industrial pattern is concentrated, and attention is being paid to overseas markets. The company reviewed the intelligent iterative path of the automobile industry in the past. The AI model brought about faster changes and implementation in the industry. Looking ahead, the company believes that there will be no more than 7 mainstream brands left in the domestic market in the next 10 years, and that it is expected to bring about continuous changes in the supply chain and dealers, and AI cars that have achieved annual sales of more than 1 million vehicles are expected to become entry tickets to the finals. In overseas markets, 1H24 has become the car company that sells the most electric vehicles of 0.03 million US dollars or more overseas. The company plans to start in Europe and account for more than half of overseas sales in the next ten years.
A full-stack AI system was developed globally, and the self-developed chip was officially released. At the press conference, the company revealed that the first AI chip Turing was successfully released on August 23. Its performance supports L4 smart driving, enabling the company to continue leading smart driving. End-to-end algorithms solve the problem that visual models do not have the ability to understand time and space, and it is more feasible to support L2-3 level smart driving with pure vision. In addition, the company officially released a new AI Hawkeye Vision Solution, which increases the vehicle's sensing distance by 125% and the recognition speed by 40%, making the vehicle capable comparable to the Max version and supporting NOA capabilities in urban areas. In terms of flying cars, vehicle flight noise was drastically reduced after product optimization, and the company plans to officially pre-sell them in 4Q24. In addition, the company simultaneously showcased the second-generation humanoid robot, which has an anthropomorphic appearance, dexterous hands, and is equipped with a large model. The company plans to debut on “1024 Science Day”.
Pricing exceeds market expectations, and the product cycle is back on the fast track. At the press conference, it was revealed that each version of the M03 model sold for 0.1198-0.1558 million yuan. We believe that the M03 product is accurately positioned and mainly targets the needs of three types of customer groups: young individuals purchasing for the first time, smart upgrades, and additional purchases for new families. Currently, the company has revealed that the 52-minute launch date will exceed 0.01 million vehicles. The design uses AI to quantify the aesthetic body posture, achieve Cd0.194 wind resistance, and increase battery life by 60 km (energy consumption of only 11.5 kWh per 100 kilometers). In terms of intelligent experience, for consumers' most painful scenarios, 4 voice assistants are standard, and the audio can achieve a superior experience of 0.2 million yuan+ competitive products. In terms of smart driving, the M03 standard version comes standard with 20+ intelligent sensing hardware, which has better LCC and parking capabilities; the Max version has safe and upgradeable advanced smart driving, which can achieve door-to-door experiences, including reverse tracking on narrow roads and guillotine roads, and parking away from the car in extremely narrow parking spaces.
Profit forecasting and valuation
The current Hong Kong/US stock prices are all corresponding to 1.5x EV/revenue in 2024, maintaining an outperforming industry rating and maintaining the 2024/25 profit forecast. Maintaining the target price of HK$38/$10, with 23%/37% upside compared to the current share price, all corresponding to 1.9x EV/revenue in 2024.
risks
Demand for new cars and autonomous vehicles fell short of expectations, and cooperation with Volkswagen fell short of expectations.