First Shanghai's research report mentioned that Ideal Autos (02015) achieved vehicle sales revenue of 41.32 billion yuan in Q3 2024, a year-on-year growth of 22.9% and a quarter-on-quarter growth of 36.3%. The total vehicle delivery volume in Q3 2024 was 0.153 million units, an increase of 45.4% year-on-year. The gross margin for Q3 vehicles increased to 20.9%. Net income was 2.81 billion yuan, a decrease of 0.3% year-on-year. The new product L6 boosted overall sales volume, with an average monthly sales volume reaching 25,000 units, further expanding the market share of domestic new energy autos priced at 0.2 million yuan and above. The Ideal market share increased from 14.4% in Q2 2024 to 17.3% in Q3, and the company plans to further increase L6 production capacity from the fourth quarter to next year. The company forecasts delivery volume for the fourth quarter to be 0.16-0.17 million units and revenue guidance of 43.2 billion-45.9 billion yuan.
The bank mentioned that the company has 479 retail centers in 145 cities, operates 436 after-sales service centers and Ideal Autos authorized body repair centers in 221 cities, has 894 Ideal supercharging stations in operation, and equipped with 4,286 charging piles, laying a solid foundation for the release of pure electric vehicle models. Pure electric vehicles are expected to be the primary incremental growth next year, with the company's market share above 0.2 million poised to further increase.
The bank predicts that the company's sales in 2024, 2025, and 2026 will reach 0.515 million vehicles, 0.718 million vehicles, and 0.944 million vehicles, with revenues of 147.5 billion yuan, 191.6 billion yuan, and 221.3 billion yuan respectively, and net income attributable to shareholders of 7.84 billion yuan, 12.99 billion yuan, and 167.5 billion yuan. The profitability level is expected to be maintained in the next three years. The bank usesfree cash flowDiscounting for the company valuation, with WACC at 11% and perpetual growth rate at 3%, the calculated fair stock price should be $33.75 / HK$132.16, representing an upside potential of 31.80% / 37.60% compared to the current price. The buy rating is maintained.