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 from 2024-2026 is estimated to be 8, 15.4, and 26.4 billion yuan, respectively, corresponding to the current market value PE of 20, 11, and 6 times, respectively. Referring to comparable company valuations, a 25-year 18xPE is given, corresponding to a 6-month target price of $130.57, equivalent to HK$142.58. The company announced that it delivered 0.059 million vehicles in December, +16.2% year-on-year and +20.1% month-on-month; a total of 0.501 million new vehicles were delivered in 2024, +33% year-on-year.

The main views of SDIC Securities are as follows:

The interest-free policy drove delivery to record highs, and MEGA sales gradually increased.

1) The bank believes that the company's delivery volume rebounded month-on-month and reached a record high in December, mainly driven by the 3-year zero-interest plan launched on November 29. According to weekly data estimates, retail sales of each model in December were about L0.628 million units, L0.713 million units, L88600 units, and L97,800 units, respectively;

2) MEGA's sales trend has been upward since June, and the number of units delivered in December has reached 1,255 units. The bank believes that the reason behind this is that the layout of overcharging stations is becoming more and more perfect (1,727 overcharging stations and 9,100 charging stations at the end of December, an increase of 592 and 3,420, respectively), gradual accumulation of product reputation and adjustments in marketing ideas, and subsequent sales are expected to continue to break through.

Sales channels and service networks continue to be upgraded. By the end of December, Ideal Auto had 502 retail centers, 478 after-sales maintenance centers and authorized sheet spray centers across the country, an increase of 27 compared to the end of November.

Outlook: Smart driving+AI are fully effective, and the pure electric series is expected to start a major product cycle

1) Smart driving enters the first tier and embraces AI at an accelerated pace: According to the sales announcement, ADMAX orders for models over 0.3 million/0.4 million in November have already exceeded 70%/80%, respectively. The OTA 7.0 version of the vehicle system will be promoted by users in January. High-speed NOA will be upgraded to an end-to-end technical architecture, and AI inference visualization functions will be launched for the first time. The sales structure is expected to continue to be optimized under the smart driving upgrade; Ideal AITalk proposes that the company will become an artificial intelligence company, and at the same time, ideal students will move from cars to mobile phones;

2) The solid layout of the pure electric series is expected to start a major product cycle: MEGA sales are gradually increasing, confirming the effectiveness of its product strength and reversal of business ideas; the infrastructure side accelerates the layout, and the number of charging stations is expected to reach 2,000 by the end of 2025Q1; at the same time, the competitive pattern of new pure electric products is good, there are few competitors, and the company's product development strength is strong, which is expected to start a major cycle of pure electric products.

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