Description of the event

Ideal sold 0.054 million vehicles in September 2024, up 48.9% year on year and 11.6% month on month.

Incident comments

Ideal's sales volume reached a record high of 0.054 million vehicles in September 2024, surpassing BBA for the first time in a single week. The ideal sales volume for September 2024 was 53,709 vehicles, up 48.9% year on year and 11.6% month on month. The cumulative sales volume for the third quarter was 0.153 million vehicles, up 45.4% year on year and 40.8% month on month, close to the upper limit of the previous mid-report guideline (0.155 million units). The cumulative sales volume for January-September was 0.342 million vehicles, up 40.0% year over year. According to weekly data, Ideal has been the number one selling brand in the Chinese market for 22 consecutive weeks, selling 0.0113 million units in the 35th week (8.26-9.1), 0.0107 million units in the 36th week (9.2-9.8), and 0.012 million units in the 38th week (9.16-9.22).

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 September 30, 2024, 894 ideal supercharging stations have been put into use, an increase of 146 over the previous month, with 4,286 charging stations, an increase of 780 over the previous month. The 900th Ideal supercharging station was launched on October 1. 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 September 2024, Ideal Auto had 479 retail centers across the country, covering 145 cities, a decrease of 2 compared to the end of last month; 436 after-sales maintenance centers and authorized sheet spray centers, covering 221 cities, an increase of 13 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 34.8X, 22.5X, 16.9X, and the net profit (non-GAAP) to mother (non-GAAP) is 8.74, respectively. 11.99 and 15 billion yuan, corresponding PE is 23.6X, 17.2X, and 13.8X, 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.