Description of the event
Ideal Auto released its 2024 quarterly report: achieved revenue of 25.63 billion yuan, +36.4% year over year; achieved sales volume of 80,000 units, +52.9% year over year, with an average monthly sales volume of 27,000 units.
Incident comments
The ideal sales volume for the first quarter of 2024 is 80,000 vehicles, and the average price of a bicycle is about 300,000 yuan. Ideal 2024Q1 achieved sales of 80,000 units, +52.9% year-on-year, with an average monthly sales volume of 27,000 units. By model, Ideal L7/L8/L9/MEGA achieved sales of 3.3, 2.1, 2.4, and 30,000 units respectively. It is expected that the subsequent L6 will complete the growth product matrix and open up sales space.
Ideal Q1 achieved revenue of 25.63 billion yuan, of which vehicle sales revenue was 24.25 billion yuan, +32.3% year over year, and -39.9% month over month.
As L7's share of sales increased and overall discounts increased, the price of the corresponding bike dropped to 302,000 yuan, -47,000 yuan year over year, and -50,000 yuan month-on-month.
Increased short-term discounts and scale effects affect gross profit margins. Subsequent organizational structure optimization is expected to improve sales volume and profit levels.
In terms of gross margin, Q1 gross margin reached 20.6%, of which vehicle gross margin was 19.3%, -0.4 pct year over year, and -3.4 pct month-on-month. Due to increased discounts and scale effects, gross margin declined month-on-month. Q1 Sales, administrative and general expenses were $2.98 billion, with an expense ratio of about 11.6%, +2.9 pct year over year and +3.8 pct month over month. The company continued to increase R&D investment in new models, intelligent driving, etc., and Q1 R&D expenses reached 3.05 billion yuan, +64.6% year over month, and -12.7% month on month. The corresponding R&D cost rate reached 11.9%, +2.0pct year over year, and +3.5pct month-on-month. Q1 The company achieved net profit (GAAP) of $590 million to mother. After adding 690 million shares to pay compensation and other categories, the company achieved net profit (non-GAAP) of 1.28 billion yuan, -9.7% year-on-year, -72.2% month-on-month, corresponding net interest rate of 5.0%, -2.5 pct, month-on-month, and bicycle profit of 16,000 yuan, year-on-year -11,000 yuan, and month-on-month. At present, Ideal has begun to optimize and adjust the organizational structure, making adjustments to product, sales, R&D and other departments. It is expected that after optimization and adjustment, Ideal will better help focus on improving user value and operating efficiency, and continue to grow. Looking ahead to 2024Q2, the L6 launch is expected to contribute an important increase. The ideal estimated delivery volume is 105,000 to 110,000 vehicles, +21.3% to 27.1% year over year, and revenue of 299 to 31.4 billion yuan, or +4.2% to 9.4% year over year.
Ideal Auto has clear plans for subsequent models, continuous layout of direct sales channels, and broad scope for future sales. Currently, there are 4 extended-range SUVs on the extended-range platform. The ideal MEGA and 2024 L series models will be officially released at the spring press conference on March 1. By the end of 2024, the product layout of “4 extended-range electric models+1 high-voltage pure electric model” will be formed. The product matrix covers more than 200,000 markets to meet a wider range of consumer needs. At the same time, the ideal channel structure continues to be optimized, and the number continues to increase. By the end of April 2024, Ideal Auto had 481 retail centers across the country, covering 144 cities; 361 after-sales maintenance centers and authorized sheet spray centers, covering 210 cities. Looking ahead to this year, the ideal sales and service network will continue to be upgraded. It is planned to increase the number of retail centers to 800 by the end of this year, and the number of after-sales service centers and authorized sheet spray centers is expected to exceed 500.
As the pioneer of the household SUV concept, 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 bicycle sales prices is expected to maintain a good profit level. The ideal sales volume is expected to reach 560,000 units (neutral) in 2024, maintaining a “buy” rating.
Risk warning
1. Global economic recovery is weaker than expected; 2. Increased industry competition weakens corporate profits.