According to the Zhitong Finance APP, Guosen Securities released a research report stating that LEAPMOTOR (09863) will be in a high-speed growth phase over the next three years, with expected operating revenues of 31.4/56.1/81.4 billion yuan for 2024-2026. Using the PS valuation method, the company’s reasonable Market Cap for 2025 is estimated to be between 44.9-50.5 billion yuan, corresponding to a stock price of 35.92-40.41 Hong Kong dollars. This is the first coverage in the past year, giving a rating of 'Outperform the Market.'

Guosen Securities' main points are as follows:

LEAPMOTOR's domestic Business is experiencing rapid growth, alongside international giants entering overseas markets.

LEAPMOTOR is a leading domestic intelligent electric vehicle company, maintaining high revenue growth in recent years, with gross profit turning profitable in 2023. The company is set to launch new models (C10/C16) in 2024, with overall sales experiencing high-speed growth (cumulative year-on-year increase of +100% from January to November 2024), setting monthly sales to new highs (over 40,000 units in November). The company has deep cooperation with Stellantis, planning to release its Global Strategy at the Paris Auto Show in October 2024.

The company's advantages stem from strong product capabilities, self-research in the entire electronics and electrical stack, and international cooperation.

The company adopts a strategy of high intelligence and high cost-performance for boutique products. Its electronic and electrical architecture is fully self-researched, achieving low-cost high intelligence, with the 'Clover architecture' iterating to version 3.5. The company has opened overseas operations through partnerships.

The global auto market is divided into five major sectors, with the EU market becoming a new growth area.

The global auto market is divided into five major sectors: the US, Japan, India, and Korea; the EU; non-EU countries in Europe; China; and other regions (Asia, Africa, Latin America, Australia, etc.). With the implementation of EU tariffs, the overall trend is moderate with room for negotiation, and it is expected to become a new area for auto exports.

EU users tend to prefer low-energy small cars, with three factors driving Chinese car manufacturers to enter Europe.

Self-owned brands in Asia, Africa, Latin America, and Australia are gaining momentum. The total scale of passenger vehicles in the EU is about 10 million units, with a stable brand concentration, but the share of European car manufacturers is declining. Europe favors small low-energy cars, with a high penetration rate of new energy, predominantly hybrids, high user loyalty, and strong purchasing power, while Chinese self-owned brands have yet to break through. Low-energy consumption habits, high price differentials between China and Europe, and strong cooperation among China and European car manufacturers are expected to drive Chinese car manufacturers into Europe. In markets such as Asia, Africa, Latin America, and Australia, Japanese models hold a high share, while domestic brands are currently gaining momentum.

Stellantis has many brands and channels, primarily based in the European market.

Stellantis was formed by the merger of two major European groups, FCA and PSA, boasting a long history and numerous brands. The main market for Stellantis models is Europe, with over half of its sales coming from the EU, but in recent years, sales in Europe have significantly declined.

The company is launching many new products while incorporating high-quality domestic channels and Stellantis's overseas channel resources.

The company will launch the B series models globally in 2025. Domestically, it adopts a dealer model, which can attract outstanding stores from former joint venture dealers; overseas, it will leverage Stellantis's channels and operational capabilities to expand from Europe to the global market. Compared to the hot-selling models in Europe, the company's sales models in Europe have strong product capabilities and high cost-effectiveness.