LEAPMOTOR(09863) 浦银国际证券·2025-03-11 16:11Investment Rating - The report maintains a "Buy" rating for Leap Motor (9863.HK) with a target price of HKD 52.4, indicating a potential upside of 26% from the current price of HKD 41.5 [2][4][6]. Core Insights - Leap Motor's sales guidance for 2025 is strong, with expectations to exceed 500,000 vehicles sold, driven by new models and mid-cycle updates [6]. - The company aims for a gross margin of over 10%, supported by its self-developed core automotive electronic components and the LEAP 3.5 architecture [6]. - Leap Motor is expected to achieve profitability in 2025, aided by effective cost management and operational leverage [6]. - The current price-to-sales ratio of 0.9x suggests potential for valuation re-rating, making it attractive compared to peers in the new energy vehicle sector [6]. Financial Performance and Forecast - Revenue is projected to grow significantly from RMB 16,747 million in 2023 to RMB 57,812 million in 2025, reflecting a compound annual growth rate (CAGR) of 80% [3][10]. - Gross margin is expected to improve from 0.5% in 2023 to 10.8% in 2025, indicating enhanced profitability [3][10]. - Net losses are forecasted to decrease from RMB 4,216 million in 2023 to a near breakeven of RMB 49 million in 2025, with a return to profitability anticipated in 2026 [3][10]. - The company achieved a revenue of RMB 134.6 billion in Q4 2024, marking a 155% year-on-year increase [9]. Valuation Methodology - The valuation is based on a sum-of-the-parts approach, applying a price-to-sales ratio of 1.1x for automotive sales and 1.0x for services and other revenues, leading to a target price of HKD 52.4 [11].