Key investment points

On November 1, 2024, Ideal Auto announced delivery data for October 2024. In October 2024, Ideal Auto delivered 51,443 new vehicles, an increase of 27.3% over the previous year.

Delivery capacity delivers sales, and new energy continues to lead with more than 0.2 million

In October 2024, Ideal Auto delivered 0.051 million new vehicles, a year-on-year increase of 27.3%. As of October 31, 2024, Ideal Auto delivered a total of 0.393 million vehicles in 2024. Product strength was gradually improved, orders for the L series and MEGA grew steadily, and the October delivery data maintained a high growth rate. Product strength has paid off sales, winning the top sales title for Chinese brands of NEV of 0.2 million yuan or more for seven consecutive months, and is expected to deliver 0.16-0.17 million vehicles in the fourth quarter.

Software functionality is accelerated, and the AD Max version is the first to push end-to-end +VLM

The urban NOA mileage penetration rate of the IDEAL CAR END-TO+VLM system has now exceeded 50%. In the “How to Evaluate the End-to-End Capabilities of Car Companies” report, we believe that Ideal has advantages in computing power and data scale, and is expected to remain ahead in future functions. The lower limit of intelligent driving functions has been significantly improved, and Ideal Auto has promoted a new generation of intelligent driving technology architecture with an end-to-end +VLM dual system to all users of AD Max platform models. Ideal cars may maintain high R&D investment in the future, and high-quality intelligent performance is expected to improve the company's user satisfaction.

Ecosystem construction is accelerating, and the smart electric strategy is expected to be implemented quickly

The ecology has gradually improved. As of October 31, 2024, Ideal Auto has 475 retail centers across the country, covering 144 cities; 444 after-sales maintenance centers and authorized sheet spray centers, covering 223 cities. Ideal Auto has put into use 1004 ideal overcharging stations across the country, and has 4910 charging stations.

Product strength leads smart driving upgrade, profit margin inflection point or

We expect the company's revenue for 2024-2026 to be 147.3/205.4/280 billion yuan, respectively, with year-on-year growth rates of 19.0%/39.4%/36.3%, net profit to mother of 8.53/14.24/23.72 billion yuan, year-on-year growth rates of -27.1%/67.0%/66.6%, EPS 4.02/6.71/11.18 yuan/share, respectively, and a 3-year CAGR of 40.6%.

The company's product strength has been improved, intelligent electric acceleration, sales volume and profitability have been realized. Maintain a “buy” rating.

Risk warning: the speed of intelligent implementation and ability to deliver sales falls short of expectations; passenger car price war may affect subsequent sales