It is becoming increasingly difficult to sustain high growth.

Investor net Wu Wei.

Recently, Li Auto Inc. (02015.HK) released its performance for the first half of 2024. The company's revenue in the current period increased by only 20.81% year-on-year, which is a low value in recent years, and its net income decreased by 47.4% year-on-year. On the evening of the release of the semi-annual report, Li Auto's stocks experienced a decline of about 16% on the NASDAQ market.

On August 19, a statement attributed to Beijing Yishide Medical Technology Co., Ltd. (referred to as "Yishide Medical") had already put Li Auto and Li Xiang in the spotlight. On August 20, in response to Yishide Medical's statement, Li Auto quickly clarified the situation and decisively used legal weapons to defend the company's legal rights and interests. According to Li Auto's disclosure, the incident was provoked by Yishide Medical using a group photo with Li Xiang as a hot topic, and despite multiple communications with them, Yishide Medical still issued the aforementioned statement.

In fact, this is not the first controversial event that Li Auto has faced this year. On March 1, 2024, Li Auto released its first MPV model, Li ONE, but it caused a lot of controversy due to its appearance. Faced with a large amount of controversy and suggestive content, Li Auto decided to use legal weapons to defend its own rights and interests. Shortly after this incident subsided, Li Auto received a "friendly reminder" from a competitor regarding its weekly rankings issue.

As Li Auto, which is mired in controversy, faces increasing competition from its popular extended-range electric vehicles, can the company break through the bottleneck of slowing growth and declining profits?

Continuous hot discussion.

Among many new energy auto startups, Li Auto is undoubtedly a successful one. In contrast to the range anxiety that pure electric vehicles struggle to address, Li Auto decisively engages in differentiated competition by developing extended-range electric vehicles and incorporating intelligence and luxury attributes into their products. The debut model, Li ONE, quickly gained market recognition. Subsequently, Li Auto launched several follow-up models such as Li X8 and Li X9. Leveraging outstanding sales, Li Auto successfully achieved dual listings on NASDAQ and the Hong Kong Stock Exchange.

There has been a lot of discussion in the market about the success of li auto inc, and the founder's flamboyant personality has also caused some controversy in the market. Recently, a photo of Li Xiang with an "owner" of li auto inc has pushed the company into the spotlight.

According to li auto inc, on June 22, Li Xiang took a photo with someone who claimed to be a li auto inc owner; that evening, various online platforms successively posted rumors about li auto inc and Medical Schrade's AI medical cooperation, as well as photos with Li Xiang. On June 24, li auto inc sent a lawyer's letter to Medical Schrade, demanding that it stop the infringement and bear corresponding legal responsibilities.

On July 4, Zhou, who claimed to be a Medical Schrade employee, contacted li auto inc's legal department and proposed a marketing hype plan, which was rejected by li auto inc. On July 6, Zhou issued an apology letter with the stamped seal of Medical Schrade. On July 12, li auto inc debunked the rumors and stated that Medical Schrade had already apologized.

However, on August 19, Medical Schrade released a statement claiming that li auto inc had deceived the company into writing an apology letter and used it to defame Medical Schrade. it strongly condemned the unethical behavior of li auto inc and Li Xiang himself, and pledged to boycott li auto inc.

In response to Medical Schrade's statement, li auto inc quickly issued a statement and used legal weapons to protect its own rights and interests. Tianyancha information shows that Medical Schrade is solely owned by Zhou Zihan, with a registered capital of only 0.1 million yuan, which has not been paid in yet, and the company has no official website. According to media reports, Zhou Yihua, the operator of Medical Schrade, is already a person subject to enforcement.

Intensifying competition

The success of li auto inc lies in deepening the differentiated track and layout of the extended-range electric vehicle market, thereby avoiding competition with pure electric vehicles such as nio inc and xiaopeng. However, as the market gradually recognizes the market prospects of extended-range electric vehicles, industry competition has become increasingly fierce. At present, automakers such as WJ, Aowei and Deep Blue have launched extended-range models. Of course, in addition to extended-range models, some models of WJ and Aowei have also launched pure electric versions to provide consumers with more choices.

Facing pressure from competitors, in April 2024, li auto inc released the new luxury SUV ideal L6 for family use, which has been recognized by the market since its launch. Since April 24, when ideal L6 started delivery, the cumulative delivery volume has exceeded 0.015 million units, setting a record for the fastest delivery of a new model of li auto inc and ranking first in domestic sales of medium and large-sized SUVs for three consecutive months from May to July.

Compared to the success of Ideal L6, the first MPV model of Ideal Cars, Ideal MEGA, did not perform well in the market. Firstly, its appearance has sparked controversy. In addition, there has been much discussion in the market about the range and pricing of Ideal MEGA.

Facing intensified industry competition and the underwhelming performance of Ideal MEGA in the market, Ideal Cars announced a price reduction on April 22. The 2024 models of Ideal L7, Ideal L8, Ideal L9, and Ideal MEGA will adopt a new pricing system, with Ideal MEGA receiving a price reduction of 0.03 million yuan. Existing owners will receive cash rebates.

It is worth noting that due to the poor market performance of Ideal MEGA and negative news such as employee layoffs, the stock price of Ideal Cars has been declining. In May, American investors filed a class action lawsuit against Ideal Cars for securities fraud, demanding compensation for the loss in stock price.

Although Ideal Cars launched MEGA and Ideal L6 in 2024, the company's revenue growth has slowed compared to before. In the first half of 2024, the revenue only grew by 20.81% year-on-year, which is a low value in recent years. In the second quarter, the company's revenue only grew by 11%. Moreover, due to the decline in gross margin and increased R&D and publicity costs, the net income of Ideal Cars in the first half of 2024 dropped by 47.4% year-on-year. Data shows that Ideal Cars didn't turn a profit until the first quarter of 2023.

Due to the lower-than-expected profitability, the stock price of Ideal Cars has dropped from the high value of HKD 180 per share on the day of MEGA's release to around HKD 80 per share, a decrease of over 50%. Recently, the company's stock price hit a low not seen since November 2022.

In the midst of various controversies, how will Ideal Cars overcome the bottleneck of slowing revenue growth and declining profits? Investor Web will continue to follow this. (Produced by Thought Finance)■