Main points of investment
Q4 is profitable and cash flow remains strong. The company's total revenue in the fourth quarter reached 17.65 billion yuan, an increase of 66.2% over the same period last year. The total income of the company in 2022 reached 45.29 billion yuan, an increase of 67.7% over the same period last year.
Thanks to the company's cost control and operating quality, the fourth-quarter gross profit margin remained solid at 20.2%, with a free cash flow of 3.26 billion yuan. Net profit for the fourth quarter of 2022 was RMB 265.3 million, compared with non-GAAP net profit of RMB 967.6 million. The net loss in 2022 was 2.03 billion yuan, compared with 321.5 million yuan in 2021. The non-GAAP net profit in 2022 was RMB20.8 million, a decrease of 97.3% from the non-GAAP net profit of RMB 779.9 million in 2021. The net cash income from operating activities in 2022 was 7.38 billion yuan, which was 11.5% less than that of 8.34 billion yuan from operating activities in 2021.
The free cash flow in 2022 was 2.25 billion yuan, a decrease of 48.0% compared with 4.33 billion yuan in 2021. As of January 31, 2023, the company has 296 retail centers covering 123 cities, and operates 320 after-sales maintenance centers and Li Auto Inc. authorized sheet spray centers in 222cities.
2023Q1 guides sales of 52000 to 55000 vehicles, with a goal of gaining nearly 20 per cent of the car market of 30 to 500000 yuan. The company directed delivery of 52000 to 55000 2022Q1 vehicles, an increase of 64.0% to 73.4% over the first quarter of 2022, and total revenue of RMB 17.45 billion to RMB 18.45 billion, an increase of 82.5% to 93.0% over the first quarter of 2022. The company hopes to get 20% of China's 30-500000 yuan auto market, and there is still a lot of potential.
Investment advice: the company opened the delivery of L7 Pro and L7 Max in early March. Delivery of the L7 Air and L8 Air will begin in early April this year. With the launch of these products and configurations, the layout of the ideal L7, ideal L8, and ideal L9 product lines for the 3-500000 SUV market has all been completed. we expect the revenue in 2023 to be RMB152.7 billion in 24th, an increase of 130% to 47% over the same period last year, the net profit to return to the parent is RMB 232.9 billion, and the net profit to Nongapp is RMB 537.5 billion. we use the PS valuation method to adjust the company's target price to HK $113.3 and maintain the "overweight" rating.
Risk tips: fierce competition in the industry, the recovery of the macro environment is not as expected, and the supply chain is in short supply.