LEAPMOTOR(HK:09863) Ge Long Hui·2025-08-20 03:07Core Viewpoint - The company maintains a "Buy" rating for Leap Motor, raising the target price to HKD 83.0, indicating a potential upside of 22% [1] Group 1: Sales and Profitability - Leap Motor's revenue for Q2 reached RMB 14.23 billion, a year-on-year increase of 166% and a quarter-on-quarter increase of 42% [2] - The gross margin improved to 13.6%, up 10.8 percentage points year-on-year, although it decreased by 1.3 percentage points quarter-on-quarter [2] - The company achieved an operating profit of RMB 61.37 million, marking its first positive result, exceeding both internal and market expectations [2] - Net profit for Q2 was RMB 16.3 million, returning to profitability after Q1 [2] Group 2: Sales Guidance and Future Outlook - The company has raised its sales guidance for 2025, expecting Q3 vehicle sales to be between 170,000 and 180,000 units, and adjusting the annual sales target to a range of 580,000 to 650,000 units [2] - With the growth in sales volume and the completion of model transitions, there is potential for further improvement in gross margin in the second half of the year, with an annual gross margin expected to reach 14%-15% [2] - The company aims to control expenses, projecting an annual profit of RMB 500 million to 1 billion [2] Group 3: Valuation - The company is valued using a sum-of-parts approach, applying a price-to-sales ratio of 1.6x for automotive sales/services and 2.0x for other revenues, leading to a target price of HKD 83.0, corresponding to a target price-to-sales ratio of 1.6x [2]