24H1's revenue increased, with an average monthly delivery of around 0.05 million units in 24Q3, maintaining the “buy” rating company 24H1's revenue of 57.3 billion yuan, +21% over the same period last year. Net profit was 1.6 billion yuan, -48% year over year; of these, 24Q2 revenue was 31.7 billion yuan, +11% year over year; net profit was 1.1 billion yuan, or -52% year over year. The company expects total delivery of 0.145-0.155 million units in 24Q3, +38.0-47.5% year over year; total revenue is between 39.4-42.2 billion yuan, +13.7-21.6% year over year. We expect the company's 24-26 sales volume of 0.49/0.79/1.04 million vehicles, corresponding revenue of 141.9/216.9/275.2 billion yuan, GAAP net profit to mother 6.2/12.7/18.4 billion yuan, and Non-GAAP net profit of 9/16/21.7 billion yuan, respectively. Geely Automobile and BYD Co., Ltd. were selected as comparable companies. The comparable company averaged 2025E 11xPE, with a premium of 5xPE. Based on the company's high unit sales price and good bicycle profitability, the company was given 16xPE for 25 years. The company's target price was HK$132.07 (previous value of HK$134.73), maintaining a “buy” rating.
24Q2 gross profit declined in the short term, and R&D investment continued to increase
24Q2's automobile sales revenue was 30.3 billion yuan, +8% year over year; service and other revenue was 1.4 billion yuan, +100% year over year. 24Q2 delivered 0.11 million vehicles, +26% year over year. Affected by product mix and pricing strategy adjustments, the company's 24Q2 gross margin was 19.5%, -2.3 pct year over year, and -1.1 pct month-on-month.
In terms of expenses, 24Q2 sales, general and administrative expenses were $2.8 billion, +21.9% year-on-year, mainly due to the increase in the number of employees combined with the expansion of the sales and service network. 24Q2 R&D expenses were 3 billion yuan, +25% compared to the same period last year. The company focused on supporting product portfolio and related technology research and development.
Improve store efficiency and speed up the layout of supercharging stations
As of July 31, '24, the company has 487 retail centers across the country, covering 146 cities; it also has 411 after-sales maintenance centers and authorized sheet painting centers, covering 220 cities. The company's charging network is rapidly expanding. As of August 25, 730 ideal supercharging stations have been put into use across the country, with 3,416 charging stations, covering 155 cities in 27 provinces. The number of charging stations increased 156 compared to July 31. In addition, the Ideal Car App Charging Map will enable self-operated overcharging and three-party one-click direct access, providing a worry-free and time-saving charging experience.
OTA6.1 push enabled, AES and AEB functions updated
On July 31, the company launched OTA 6.1. The OTA6.1 version establishes a strong line of safety. The AD MAX model automatically switches to AES at a maximum activation speed of 135 km/h. The AES function can be activated in both intelligent driving and human driving states, supporting recognition and risk avoidance in various scenarios. OTA6.1 also improved the AEB's ability to cope with close-range blocking in terms of sensing accuracy and response speed. After the version is updated, it can achieve close-range anti-collision capability for front vehicles and riders. In terms of intelligent driving, the speed limit offset unit was adjusted from 10 km/h to 5 km/h. Smart driving speed control is freer and more delicate to meet users' personalized usage scenarios. In order to improve safety in road construction scenarios, AD Pro has also added a continuous cone alarm function.
Risk warning: Macroeconomic downturn, consumer demand falls short of expectations, supply chain shortages.