Citi issued a research report indicating that Li Auto (02015.HK)(LI.US) is actively expanding into the robotics field, repositioning its strategic focus on "embodied intelligence," and planning to develop humanoid robots and dedicated AI-driven hardware. To appropriately reflect the valuation of the robotics business, the bank has shifted its estimation model from a simple price-to-sales ratio to a sum-of-the-parts (SOTP) approach. Accordingly, it raised its target price for the US stock from $18.50 to $18.90 and the Hong Kong stock target price from HK$71.1 to HK$72.7.
Furthermore, the bank's sensitivity analysis regarding recent increases in raw material costs shows that high-priced electric vehicle models demonstrated some resilience against cost pressures during the uncertain automotive sales off-season of Q1 2026. This may explain why Li Auto and Seres (09927.HK) have recently outperformed XPeng Motors (09868.HK) and BYD (00285.HK). The bank maintained a "neutral" rating for Li Auto.
The bank revised its 2025 forecasts to align with actual sales performance in 2025. For 2026 and 2027 forecasts, considering weak order growth in January 2026 and a downward revision in the industry’s EV sales growth forecast, the sales volume projections were reduced by 5% to 430,000 units (2026) and by 7% to 468,000 units (2027). Gross margin forecasts were also lowered by 0.2 percentage points to 17.5% for 2026 and 17.3% for 2027. Additionally, reflecting new initiatives in the robotics sector, the bank increased its R&D expense forecasts for 2026 and 2027. Consequently, net profit forecasts for 2025, 2026, and 2027 were adjusted downward by 1%, 23%, and 26% to RMB 9.52 billion, RMB 18.49 billion, and RMB 25.80 billion, respectively.~(ec/u)
