Incident: 2024Q2 achieved revenue of 31.68 billion yuan, 10.6% year over month; of which automobile sales revenue was 30.32 billion yuan, 8.4% year over year and 25.0% month over month, the increase was mainly due to increased car deliveries; realized net profit of 1.103 billion yuan, -51.9% year on year, 86.1% month on month; gross profit margin 19.5%, -2.3 pct year on year, and -1.1 pct month on month. The decline in gross margin was mainly due to different product combinations and pricing strategies Changes.
Q2 Sales increased strongly, and the cost ratio declined significantly from month to month. The 2024Q2 company delivered 108,581 vehicles, 25.5% year-on-year and 35.1% month-on-month. Sales of L series models increased significantly after the launch of the L6 model; bicycle revenue was 0.2792 million yuan, down 0.022 million yuan month-on-month, mainly due to the company's Q2 price strategy adjustments and the increase in the L6 model's share of sales. 2024Q2's sales management/R&D expenses were 2.815/3.028 billion yuan respectively, and the sales management/R&D expenses rates were 8.9%/9.6%, 0.8 pct/1.1 pct year over year, and -2.7 pct/-2.3 pct, respectively. The cost rates all decreased significantly from month to month.
The construction of intelligent driving and charging pile networks continues to advance. In July 2024, the company launched OTA 6.0 and 6.1 updates to launch an unmapped NOA that can be used nationwide to all ideal AD Max owners. Additionally, a new autonomous driving technology architecture based on end-to-end (E2E) and visual language models (VLM) opened early bird testing at the end of July. As of June 30, 2024, the company has put 614 overcharging stations into use across the country, equipped with 2,726 charging stations.
Looking ahead to the third quarter: The company expects car deliveries of 0.145-0.155 million vehicles, up 38% to 47.5% year on year; revenue is expected to be 39.4 billion to 42.2 billion, up 13.7% to 21.6% year on year; as deliveries increase and cost reduction and efficiency continue to advance, the overall gross margin for the third quarter is expected to return to more than 20%.
Profit forecast: The company's revenue for 2024-2026 is expected to be 149.8/225.8/263.4 billion yuan, up 21%/51%/17% year on year, and net profit of 8.1/12.8/21 billion yuan, respectively, -31%/58%/64% year on year. The current stock price corresponds to 2024-2026 PE 19/12/7 times, respectively. Maintain a “buy” rating.
Risk warning: Competition in the industry intensifies, the company's sales volume falls short of expectations, progress in new pure electric vehicles falls short of expectations, risk of rising costs, etc.