LEAPMOTOR(09863) 华泰证券·2024-09-05 04:03Investment Rating and Target Price - The report initiates coverage on Leapmotor (9863 HK) with a "Buy" rating and a target price of HKD 31.24, based on a 0.67x PS multiple for 2025, in line with peers like Li Auto, NIO, and XPeng [1][4] Core Investment Thesis - Leapmotor's core competitiveness lies in its in-house developed LEAP platform, which covers approximately 60% of vehicle costs through self-developed and self-manufactured core components [1][2] - The company is expanding its product matrix with both pure electric and range-extended models, targeting the mainstream 10-20 million RMB price segment [1][2] - Leapmotor's international expansion, accelerated by the strategic investment from Stellantis and the establishment of Leapmotor International, is expected to significantly enhance its growth potential [1][2] Financial Projections - Leapmotor's total vehicle sales are projected to grow from 266,000 units in 2024 to 694,000 units in 2026, representing year-over-year growth rates of 85%, 82%, and 43% respectively [1] - Revenue is expected to increase from RMB 31.9 billion in 2024 to RMB 79.5 billion in 2026, with year-over-year growth rates of 90%, 79%, and 39% respectively [1][3] Product Strategy and Market Positioning - Leapmotor focuses on the 10-20 million RMB mainstream market, with a product matrix that includes five mass-produced models: T03, C11, C01, C10, and C16 [2] - The company has introduced a dual powertrain strategy with both pure electric and range-extended models, enhancing its product offerings [2] - Leapmotor plans to launch multiple new models annually from 2025 to 2027 to maintain its cost advantage and expand its platform capabilities [2] Technological Advancements - The LEAP 3.0 platform features significant advancements in electronic architecture, battery CTC technology, and intelligent driving systems, contributing to cost reduction and improved performance [2] - The "Four-Leaf Clover" electronic architecture integrates four domains with two chips, achieving efficient coordination and cost savings [2] - Leapmotor's self-developed battery and electric drive systems have entered mass production, with some components already being supplied to external customers [2] International Expansion - Leapmotor International, a joint venture with Stellantis, adopts a light-asset model for overseas expansion, leveraging existing production and channel resources [2] - The company plans to start deliveries in Europe in Q3 2024 and expand to India, Asia-Pacific, the Middle East, Africa, and South America within the same year [2] - Leapmotor is also exploring technology licensing opportunities with Stellantis, potentially opening a new revenue stream through technology exports [2] Financial Performance and Profitability - Leapmotor's revenue grew by 35% year-over-year in 2023, reaching RMB 16.7 billion, with a narrowing net loss of RMB 4.2 billion [21] - The company achieved positive gross margin for the first time in 2023, with a full-year gross margin of 0.48%, and is expected to reach 8-10% when dealer rebates are included [22] - In H1 2024, Leapmotor's gross margin improved to 1.13%, with Q2 gross margin reaching 2.76%, driven by new model launches and increased sales [23] Market and Competitive Landscape - Leapmotor operates in the 10-20 million RMB price segment, where there is significant room for新能源 penetration, with a current新能源 penetration rate of 29.7% in this segment [28] - The company faces competition from other new energy vehicle manufacturers, but its focus on cost efficiency and technological innovation positions it well in the market [28] - Leapmotor's sales network has expanded to over 180 cities, with a mix of direct and authorized dealerships, supporting its market penetration efforts [38]