Description of the event

Ideal sold 0.051 million vehicles in October 2024, up 27.3% year on year and down 4.2% month on month.

Incident comments

Ideal sold 0.051 million vehicles in October 2024, ranking first among the new brands in the Chinese market for 27 consecutive weeks. The ideal sales volume for October 2024 was 51,443 vehicles, up 27.3% year on year and down 4.2% month on month. The ideal estimated delivery volume is 16 to 0.17 million vehicles, an increase of 21.4% to 29.0% over the previous year. Based on this, it is estimated that the total sales volume for November & December 2024 will be 11 to 0.12 million vehicles. The cumulative sales volume for January-October was 0.393 million vehicles, up 38.2% year over year. According to weekly data, Ideal has been the number one selling brand in the Chinese market for 27 consecutive weeks, selling 0.0134 million units in the 41st week (10.7-10.13), 0.0121 million units in the 42nd week (10.14-10.20), and 0.0113 million units in the 43rd week (10.21-10.27).

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 October 31, 2024, 1,004 ideal supercharging stations have been put into use, an increase of 110 over the previous month, with 4,910 charging stations, an increase of 624 over the previous month. 2) Intelligence: Ideal Autonomous Driving continues to iterate, and the company launched the OTA 6.4 update for Ideal MEGA and Ideal L series models in October. 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. Looking forward to a strong new vehicle cycle next year to open up sales space. At the same time, the ideal channel structure continues to be optimized and the number continues to increase. By the end of October 2024, Ideal Auto had 475 retail centers across the country, covering 144 cities, a decrease of 4 compared to the end of last month; 444 after-sales maintenance centers and authorized sheet spray centers, covering 223 cities, an increase of 8 compared to the end of last month.

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. Net profit (GAAP) is expected to be 8.1, 14.68, and 20.08 billion yuan respectively for 2024-2026, corresponding PE is 21.5X, 11.8X, 8.7X, and net profit (non-GAAP) is 11.1, 17.88, and 23.28 billion yuan, respectively. The corresponding PE is 15.7X, 9.7X, 7.5X, maintaining a “buy” rating.

Risk warning

1. The global economic recovery was weaker than expected;

2. Increased competition in the industry weakens corporate profits.