Description of the event

Ideal Auto sold 0.048 million units in August 2024, up 37.8% year on year and down 5.6% month on month.

Incident comments

Ideal sold 0.048 million vehicles in August 2024, ranking first among new brands in the Chinese market for four consecutive weeks. The ideal sales volume for August 2024 was 48,122 vehicles, up 37.8% year over year and down 5.6% month over month. The cumulative sales volume in January-August was 0.288 million vehicles, up 38.4% year over year. According to weekly data, with the increase in Ideal L6 orders, Ideal Weekly Sales volume stabilized above 0.01 million, winning the first sales volume for four consecutive weeks (31-34 weeks), 0.0118 million units sold in the 31st week (7.29-8.4), 0.0111 million vehicles in the 32nd week (8.5-8.11), 0.0107 million vehicles in the 33rd week (8.12-8.18), sales volume in Week 34 (8.19-8.25) 0.0116 million vehicles. According to Ideal Auto Report Guidelines, the company expects Q3 deliveries to be 14.5 to 0.155 million vehicles (0.15 million hub vehicles), up 38.0% to 47.5% year on year. From this, it is estimated that Ideal expects to deliver 0.046-0.056 million vehicles (0.051 million hub vehicles) in September, an increase of 27.2% to 55.0% year over year.

Under the “dual energy strategy”, the rapid layout of supercharging stations across the country and intelligent technology enhances the user experience. 1) Electricity: On March 1, Ideal 5C supercharging piles were officially put into use. As of August 31, 2024, 748 ideal supercharging stations have been put into use, an increase of 47 over the previous month, with 3,506 charging stations, an increase of 246 over the previous month. Looking forward to the future, the ideal plan is to invest 6 billion yuan. By the end of 2024, a total of 2,000 overcharging stations will be built, and a total of more than 5,000 overcharging stations will be built in the future.

2) Intelligence: Ideal Autonomous Driving continues to iterate. The OTA 6.0 and OTA 6.1 vehicle systems were launched in July. The Ideal L series and Ideal MEGA have achieved major version upgrades, and the national Magra has been promoted to all AD Max owners. At the same time, users will be provided with supervised L3 autonomous driving experiences as early as the end of 2024 and no later than the first half of 2025, and L4 level unsupervised autonomous driving will be achieved within three years.

Ideal Auto has clear plans for subsequent models, continuous layout of direct sales channels, and broad scope for future sales. At present, Ideal has formed a product layout of “4 extended-range electric models+1 high-voltage pure electric model”. The product matrix covers a market of more than 0.2 million, meeting a wider range of consumer needs. At the same time, the ideal channel structure continues to be optimized and the number continues to increase. By the end of August 2024, Ideal Auto had 481 retail centers across the country, covering 145 cities, a decrease of 6 compared to the end of last month; 423 after-sales maintenance centers and authorized sheet spray centers, covering 220 cities, an increase of 12 compared to the end of last month. Looking ahead to this year, the ideal sales and service network will continue to be upgraded. It is planned to increase the number of retail centers to 800 by the end of this year, and the number of after-sales service centers and authorized sheet spray centers is expected to exceed 500.

Ideal Auto's product advantages and brand design are deeply rooted in the hearts of the people, and the “Dual Energy Strategy” is expected to further expand the advantages of Ideal Auto.

Subsequent new models will be launched one after another to further improve the ideal product matrix and increase the ideal overall sales space. The combined scale effect of high bike sales prices is expected to maintain a good profit level. The ideal sales volume is expected to reach 0.53 million vehicles (neutral) in 2024. The estimated net profit (GAAP) for 2024-2026 is 5.94, 9.19, and 12.2 billion yuan, respectively. The corresponding PE is 24.1X, 15.6X, 11.8X, and the net profit (non-GAAP) to mother (non-GAAP) is 8.74, 11.99 and 15 billion yuan, corresponding PE is 16.4X, 12.0X, and 9.6X, respectively, maintaining a “buy” rating.

Risk warning

1. The global economic recovery was weaker than expected;

2. Increased competition in the industry weakens corporate profits.