Asia Vets Financial App learned that Guozheng International released a research report stating to maintain a "buy" rating for Li Auto Inc. (02015), bullish on Li Auto's very strong product definition capabilities. Since the launch of the L6, it has been in high demand, driving performance growth. The target price has been raised to HK$120.

The main points of Guojing International are as follows:

The third-quarter performance met expectations.

In the third quarter of 2024, the revenue was 42.9 billion yuan, a year-on-year growth of 24%, a quarter-on-quarter growth of 35%; GAAP net profit attributable to the parent company was 2.8 billion yuan, a year-on-year decrease of 0.1%, a quarter-on-quarter growth of 155%; non-GAAP net profit was 3.9 billion yuan, a year-on-year growth of 11%, a quarter-on-quarter growth of 156%. The company's revenue for the first three quarters was 100.2 billion yuan, a year-on-year growth of 22%; GAAP/non-GAAP net profit attributable to the parent company was 4.5/6.7 billion yuan, a year-on-year decrease of 25%/12%.

The increase in sales volume in the third quarter has strengthened economies of scale, leading to an improvement in gross margin compared to the previous quarter.

In the third quarter, the company achieved vehicle sales revenue of 41.32 billion yuan, corresponding to a per vehicle revenue of 0.27 million yuan, a decrease of 0.009 million yuan from the second quarter, mainly due to the increase in the proportion of L6 sales. The company delivered 0.15 million vehicles in the third quarter, a 45% year-on-year increase and a 41% quarter-on-quarter increase. The increase in sales volume drives improved economies of scale, resulting in an improvement in gross margin. The gross margin for the third quarter was 21.5%, a 0.5 percentage point year-on-year decrease, and a 2.0 percentage point quarter-on-quarter increase. Despite the increase in the proportion of L6 sales in the third quarter, the company still maintained an increase in gross margin. The company expects the delivery guidance for the fourth quarter of 2024 to be 0.16 million-0.17 million units, with revenue guidance of 43.2 billion-45.9 billion yuan.

End-to-end intelligent driving solutions improve user experience and help increase sales.

In October 2024, Li Auto Inc introduced the Asia Vets driving solution "end-to-end+VLM", upgraded the Li ONE series and Li X series on a larger scale, and pushed nationwide image-free NOA to all ADMax owners. At the earliest by the end of 2024, latest by the first half of 2025, providing users with supervised L3 level autonomous driving experience, achieving L4 level unsupervised autonomous driving within three years.

Risk reminder: industry competition is intensifying; prices are lower than expected.