SINOLINK SECURITIES·2024-08-29 04:03Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [1][8]. Core Insights - The company's Q2 2024 performance met expectations, with significant growth in vehicle sales and revenue. Q2 vehicle sales reached 983,000 units, a year-on-year increase of 40.3% and a quarter-on-quarter increase of 57.4%. Total revenue was 176.18 billion yuan, up 25.9% year-on-year and 41% quarter-on-quarter [2]. - The report highlights a strong outlook for Q3, with anticipated sales of 1.1 million units and a recovery in gross margins due to the introduction of the DM-i 5.0 model, which is expected to enhance the company's product mix and profitability [2][3]. - The company is positioned to benefit from technological advancements and new vehicle cycles, as well as expanding its international market presence, which is projected to yield higher profit margins compared to domestic sales [2][3]. Summary by Sections Financial Performance - Q2 2024 revenue from automotive and battery business was 134.08 billion yuan, with a gross margin of 18.7%. The net profit attributable to shareholders was 9.06 billion yuan, reflecting a year-on-year increase of 32.8% and a quarter-on-quarter increase of 98.4% [2][3]. - The report forecasts net profits for 2024-2026 to be 35.53 billion, 44.06 billion, and 53.09 billion yuan respectively, with corresponding P/E ratios of 18.1, 14.6, and 12.1 [3]. Market Outlook - The company is expected to maintain strong sales momentum, driven by the DM-i 5.0 model and an improved product mix. The report anticipates a continued upward trend in vehicle profitability starting from Q2 2024 [3]. - The report emphasizes the importance of the company's international expansion, predicting that overseas operations could achieve gross margins exceeding 30%, significantly contributing to overall profitability [2][3].