LI AUTO(02015) 交银国际证券·2025-03-17 08:15Investment Rating - The investment rating for the company is downgraded to Neutral with a target price of HKD 93.62, reflecting a potential downside of 17.3% from the current closing price of HKD 113.20 [1][7][8]. Core Insights - The report indicates that the automotive gross margin for the fourth quarter was below expectations, with a gross margin of 19.7%, which is lower than the market expectation of approximately 20%. This decline is attributed to a decrease in average selling price (ASP) and an increase in per-vehicle costs, including provisions for purchase commitment losses and promotional activities negatively impacting ASP [2][8]. - The company has guided for first-quarter sales between 88,000 to 93,000 vehicles, with March sales estimated at 32,000 to 37,000 vehicles, suggesting that recent price cuts have effectively stimulated sales recovery. However, the ASP is expected to continue declining to around RMB 250,000 in the first quarter, which is below expectations [2][8]. Financial Overview - Revenue projections for the company are as follows: - 2023: RMB 123.851 billion - 2024: RMB 144.460 billion (YoY growth of 16.6%) - 2025E: RMB 157.981 billion (YoY growth of 9.4%) - 2026E: RMB 202.373 billion (YoY growth of 28.1%) - 2027E: RMB 224.975 billion (YoY growth of 11.2%) [3][16]. - Net profit estimates are: - 2023: RMB 11.704 billion - 2024: RMB 8.032 billion - 2025E: RMB 8.560 billion - 2026E: RMB 10.843 billion - 2027E: RMB 12.458 billion [3][16]. - The report highlights a significant drop in earnings per share (EPS) for 2023, with a forecast of RMB 5.95, declining to RMB 4.03 in 2024, and a slight recovery to RMB 4.29 in 2025 [3][16]. Market Competition and Challenges - The report notes that the company faces significant challenges in terms of sales growth, cost control, and market competitiveness. The competition is expected to intensify in 2025 with the introduction of more range-extended competitors, including new models from rival companies [8]. - The sales forecast for 2025 has been reduced by 7.5% to 558,000 vehicles, reflecting concerns over the sales performance of the range-extended series and new electric models [8].