Li Auto's Earnings Review：Survive the Fierce Competition

In April, ideal car sales soared 516% to 25,681 units. The second-quarter car delivery guidance was 76,000 to 81,000 units, exceeding market expectations of about 73,000 units.

The overall sales in the second quarter climbed, and the management expects to achieve a monthly delivery of more than 30,000 in June.

The company's revenue guidance is between 24.22 billion and 25.68 billion, which is still significantly higher than market expectations; but behind this sales volume, the unit price of cars in the second quarter may not exceed 315,000 yuan, and the starting price of the current main model L7 Air is 319,800 yuan, which is also That is to say, the follow-up possible best-selling models are mainly concentrated on this relatively low-priced car, while the sales of the high-priced L9 seem to be under pressure. In terms of models, the combined sales of L8 and L9 accounted for about 60% in the first quarter, and the sales of L7 accounted for about 40%.

The gross profit rate per vehicle of the car sales business is 19.8%, barely meeting market expectations; however, considering that the gross profit rate of peers generally fell in the first quarter, the ideal performance is quite stable.

The main reason for the quarter-on-quarter decline in gross profit margin in the first quarter was that the sales of Ideal ONE lowered the profit margin by about 1.6%. At present, the clearance of Ideal ONE has been completed, and it is expected to stop selling at the end of the second quarter, so there is a certain room for improvement in the follow-up gross profit rate. However, some other BOM costs may be added, so the overall annual gross profit margin of 20% is still maintained.

The company's ability to control expenses is obvious to all, and it was even more extreme in the first quarter. For the first time, R&D expenses also experienced a quarter-on-quarter decline. Although new cars were launched, sales expenses only increased by less than 100 million quarter-on-quarter. In the end, ideally delivered the first positive operating profit. The market Still expected to be an operating loss.

Research and development expenses will remain unchanged at the annual target of more than 10-12 billion yuan. As for SG&A as a percentage of revenue, the company has continued to improve since the fourth quarter of last year.

The company's pure electric model is expected to be released in the fourth quarter of this year, maintaining a release and delivery rhythm similar to L7/8/9. In terms of pricing, the flagship model may be priced at more than 500,000 RMB, while the rest of the models are priced in the range of 200,000-500,000.

In terms of gross profit margin of pure electric vehicles, the core goal is to sell high-voltage pure electric vehicles at a price close to that of extended-range vehicles, and to obtain similar gross profit margins. The capital expenditure in the past three years was about 10 billion yuan. In the 3 years from this year, according to our estimates, the capital expenditure including high-performance computing (HPC) is about 18 billion RMB.

At present, the company's models have a certain competitive advantage in the industry. Judging from the actual orders, L8's orders are still growing and are in a virtuous circle recognized by users. From the perspective of specific models, it has a differentiated advantage compared with its peers. The main competitor is the Tesla Model Y.