The Zhitong Finance App learned that SDIC Securities released a research report stating that maintaining the Ideal Automobile-W (02015) “Buy-A” rating, the company's net profit for 2024-2026 is 8, 15.4, and 26.4 billion yuan, respectively, with a target price of HK$142.58. The company delivered 0.049 million vehicles in November, +18.8% year-on-year and -5.3% month-on-month; in January-November '24, the company delivered a total of 0.442 million new vehicles. To complete the annual 0.502-0.512 million delivery guidelines disclosed in the three-quarter report, the company must deliver 0.06 million or more in December.

The main views of SDIC Securities are as follows:

The bank believes that the main reason for the month-on-month decline in the company's delivery volume in November is:

1) Competition has increased and market competition has intensified; 2) According to the public results meeting of the third quarterly report, L6's current production capacity cannot meet order demand, and the factory will accelerate production expansion during the 2025 Spring Festival to meet order demand. Looking at retail data, in the first three weeks of November, the average weekly sales volume for L6 was about 6,000 units, and the total weekly sales volume for L7/8/9 was about 5,578 units. On November 29, a 3-year zero interest plan was launched, which is expected to drive up sales in December; pure electric products are basically stable, and MEGA's average weekly sales volume is about 197 units. The bank believes that as product reputation gradually accumulates and the layout of overcharging stations becomes more and more perfect, subsequent sales are expected to break through.

Sales channels and service networks continue to be upgraded. By the end of November, Ideal Auto had 475 retail centers, 451 after-sales maintenance centers and authorized sheet spray centers across the country, an increase of 7 over the end of October

Outlook: The extended-range series is expected to pick up, and the pure electric series has great potential for sales.

1) The Extended Range series is expected to rebound in sales volume and optimize the sales structure: the company focuses on the L series, and the L series sales volume is expected to pick up; according to the sales announcement, AdMax orders for models over 0.3 million/0.4 million in November accounted for more than 70%/80%, respectively. The parking space to parking space on November 28 was fully promoted along with OTA6.5, and the smart driving upgrade is expected to continue to optimize the sales structure.

2) The solid layout of the Pure Electric series is expected to start a major product cycle: on the infrastructure side, there were 1,135 overcharging stations and 5,680 charging piles by the end of November, an increase of 131 and 770 charging stations respectively; on the car side, the company has a solid layout of high-voltage fast charging technology, and MEGA products are strong. After the company reverses its thinking and operates at a pace from 0 to 1, sales are expected to break through. The sales potential for new pure electric products is high after the launch of new pure electric products in 2025.

Risk warning: Industry competition increases risk, supply chain cost reduction falls short of expectations, model launch pace falls short of expectations, etc.