2022-08-15 16:51Financial Data and Key Metrics Changes - Total revenues for Q2 2022 were RMB8.73 billion (US$1.3 billion), a 73.3% increase from RMB5.04 billion in Q2 2021 [16] - Vehicle sales in Q2 2022 were RMB8.48 billion (US$1.27 billion), up 73% from RMB4.9 billion in Q2 2021 [16] - Gross profit for Q2 2022 was RMB1.88 billion (US$280.4 million), a 97.1% increase year-over-year [17] - Net loss for Q2 2022 was RMB641 million (US$95.7 million), representing a 172.2% increase year-over-year [20] - Operating cash flow for Q2 2022 was RMB1.13 billion (US$168.6 million) [20] Business Line Data and Key Metrics Changes - Vehicle deliveries in Q2 2022 reached 28,687, a 63.2% year-over-year increase [7] - Deliveries in July 2022 were 10,422, up 21.3% year-over-year [7] - Revenues from other sales and services were RMB249 million (US$37.2 million), an 83.6% increase from RMB135.7 million in Q2 2021 [17] Market Data and Key Metrics Changes - China's retail sales of new energy passenger vehicles surpassed 1.17 million in Q2 2022, more than doubling year-over-year, with penetration rates climbing to 27.1% from 21.8% in Q1 2022 [6] Company Strategy and Development Direction - The company aims to enhance its product offerings and expand its direct sales and servicing network, with 259 retail stores and 311 service centers as of July 31, 2022 [10] - The launch of the Li L9, a flagship smart SUV, is focused on family users, featuring advanced autonomous driving capabilities and premium features [11][12] - The company plans to launch a high-power charging BEV model next year and is working on deploying a HPC network [14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding supply chain normalization in the second half of the year, despite ongoing pandemic-related challenges [8] - The company expects Q3 2022 deliveries to be between 27,000 to 29,000 vehicles, representing a 7.5% to 15.5% increase from Q3 2021 [21] - Total revenues for Q3 2022 are expected to be between RMB8.96 billion and RMB9.56 billion (US$1.34 billion to US$1.43 billion), reflecting a 15.3% to 22.9% increase from Q3 2021 [21] Other Important Information - The company achieved a gross margin of 21.5% in Q2 2022, up from 18.9% in Q2 2021 [18] - R&D expenses increased by 134.4% year-over-year to RMB1.53 billion (US$228.7 million) in Q2 2022 [19] Q&A Session Summary Question: Can you break down the Q3 guidance by Li ONE and L9? - Management confirmed that they expect to ship more than 10,000 L9 in September and that L9 will have a higher gross margin due to its high-end product positioning [24] Question: Are you seeing competitive threats from other brands? - Management stated that L9 has a unique product positioning and does not see close competition in its price band [26] Question: What is the reason for the conservative Q3 guidance? - Management indicated that the slowdown in Li ONE orders is partly due to the attention on the new L9 model [30] Question: How much of the weakness in Li ONE orders is due to L9 cannibalization? - Management noted that the order intake pattern for Li ONE changed when customers test drove L9, leading to some conversion to L9 orders [36] Question: What is the outlook for battery costs and gross margin? - Management expects fluctuations in battery raw material costs, which will impact gross margin [42] Question: What is the strategy for EREV products? - Management believes that EREV remains the best solution for SUVs, particularly for long trips [45]