LEAPMOTOR(HK:09863) Ge Long Hui·2025-08-19 05:21Core Viewpoint - Citigroup forecasts that Leap Motor's Q3 sales will increase from 134,000 units in Q2 to between 170,000 and 180,000 units, driven by strong sales momentum and improved profit margins [1] Sales Forecast - Q3 sales are projected to be approximately 60,000 units in August and 64,000 to 65,000 units in September [1] - Sales forecasts for 2025 to 2027 have been raised from 560,000, 1,050,000, and 1,440,000 units to 600,000, 1,200,000, and 1,800,000 units respectively [1] Profitability Expectations - Net profit margin is expected to rise from 1.1% in Q2 to between 1.5% and 2% or higher due to increased sales [1] - Net profit forecasts have been adjusted upward by 11% to 26% to reach 1.1 billion, 4.17 billion, and 6.32 billion yuan for 2025, 2026, and 2027 respectively [1] Margin Improvement - Gross margin forecasts have been increased by 2.4 to 4.8 percentage points to 14.8%, 15.4%, and 15.5% due to scale effects from higher sales assumptions [1] Target Price Adjustment - Citigroup has raised the target price for Leap Motor from 86.4 HKD to 100 HKD, corresponding to a projected P/E ratio of 29.5 times for 2026 [1] - The company is under a 90-day upward catalyst observation based on the adjustments in sales, gross margin, and net profit [1]