Incident: On September 19, the first model of the NIO Ledao brand, the Ledao L60, was officially launched. A total of two models were launched, with a pricing range of 0.2069-0.2359 million yuan. Nationwide delivery began on September 28.

Ledao's first model, the L60, was officially launched, which is outstanding in terms of cost performance compared to competing products. The LEDO L60 has a body size of 4828/1930mm/1616mm and a wheelbase of 2950mm, which is superior to the Tesla Model Y in terms of body size and interior space. The model is developed based on NIO's third-generation technology platform NT3.0, equipped with a 900V high-voltage platform, and will share a power exchange network with NIO's main brand. In terms of intelligent driving, the model is equipped with 30 pieces of auxiliary driving hardware. High-speed city express pilot-assisted NOA deliveries enjoy 99.99% coverage of the country, while full-scene pilot-assisted NOA deliveries cover 726 cities, over 2,700 county-level administrative districts. In terms of the cockpit, the model is equipped with a Qualcomm Snapdragon 8155 cockpit chip, with 60 TOPS AI computing power. All models are equipped with the SkyOS Tianhub operating system, and the model's intelligence is in a leading position among competitors.

The target price brings rapid market growth, which is expected to drive the brand's sales volume up. In 2023, the national sales volume of new energy passenger vehicles of 0.2-0.3 million yuan was 1.428 million units, +135.0% year on year. The sales volume in January-August 2024 was 1.116 million units, +40.0% year over year, and the overall market size grew rapidly. Among the best-selling models in the market, in August 2024, the Tesla Model Y, Ideal L6, and Qunjie M7 sold 0.045 million units, 0.025 million units, and 0.011 million units in a single month, respectively. As a sub-brand of NIO, the Ledao brand has broken through to a larger market in terms of overall pricing. We believe that the Ledao L60 model has comprehensive market competitiveness in various aspects such as space, energy supplementation, and tri-electric systems, which is expected to further expand the company's market coverage and drive high sales growth.

Multi-brand strategic layout opens up sinking market space. In terms of models, the company uses a multi-brand strategic layout to sink the market. The second model of the Ledao brand is expected to be launched in 2025, positioning it as a medium to large SUV, or there will be 6/7 seater versions to meet household needs. The Firefly brand is expected to be launched in 2025Q2, opening up a broad market space for mid-range and low-end models. In terms of charging and switching layout, NIO currently has 0.025 million+ of its own charging piles and 1 million+ of third-party charging piles. By the end of 2025, the number of usable power exchange stations in Ledao will reach more than 2,500. The power exchange county will reach 27 provincial administrative districts, covering 2,300 county-level administrative districts, and the construction of energy supplementation networks will continue to advance.

Profit forecast: In 2024-2026, the company is expected to achieve revenue of 77.619, 110.354, 135.902 billion yuan, and net profit to mother of -16.717, -11.998, and -7.004 billion yuan, maintaining the “recommended” rating.

Risk warning: New energy penetration rate falls short of expectations; model sales fall short of expectations; industry competition intensifies.