Description of the event

Ideal sold 0.049 million vehicles in November 2024, up 18.8% year on year and down 5.3% month on month.

Incident comments

Ideal sold 0.049 million vehicles in November 2024, ranking first among new brands in the Chinese market for 31 consecutive weeks. The ideal sales volume for November 2024 was 48,740 vehicles, up 18.8% year on year, down 5.3% month on month. The cumulative sales volume for January-November was 0.442 million units, up 35.7% year on year. The ideal is to deliver 16 to 0.17 million vehicles in Q4, up 21.4% to 29.0% year on year. Based on this estimate, sales volume in December is expected to be 6.0 to 0.07 million vehicles, an increase of 18.8% to 38.7% year over year. According to weekly data, Ideal has been the number one selling brand in the Chinese market for 31 consecutive weeks, selling 0.0114 million units in the 44th week (10.28-11.3), 0.0117 million units in the 45th week (11.4-11.10), 0.0123 million units in the 46th week (11.11-11.17), and 0.0116 million units in the 47th week (11.17-11.24).

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 November 30, 2024, 1,135 ideal supercharging stations have been put into use, an increase of 131 over the previous month, with 5,680 charging stations, an increase of 770 over the previous month. 2) Intelligence: Ideal Autonomous Driving continues to iterate, and the company launched the OTA 6.5 version of the vehicle system to Ideal users in November. The iteration of smart driving technology has led to an increase in demand for AD Max models. Currently, models with an ideal value of 0.3 million yuan or more account for over 70% of AD Max sales, and models over 0.4 million yuan account for more than 80% of AD Max sales. At the same time, the ideal plan is to provide users with a supervised L3 autonomous driving experience as early as the end of 2024 and no later than the first half of 2025, and achieve L4 level unsupervised autonomous driving 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 November 2024, Ideal Auto had 475 retail centers across the country, covering 141 cities, the same level as at the end of last month; 451 after-sales maintenance centers and authorized sheet spray centers covered 223 cities, an increase of 7 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 22.0X, 12.2X, and 8.9X, respectively, and net profit (non-GAAP) is 11.1, 17.88, and 23.28 billion yuan respectively, corresponding PE is 16.1X, 10.0X, 7.7X, maintaining a “buy” rating.

Risk warning

1. The global economic recovery was weaker than expected;

2. Increased competition in the industry weakens corporate profits.