LEAPMOTOR(HK:09863) Haitong Securities International·2025-05-20 01:37Investment Rating - The report maintains an "OUTPERFORM" rating for the company [3][7]. Core Insights - Leapmotor achieved a record-high gross margin of 14.9% in Q1 2025, with revenue reaching RMB 10.02 billion, reflecting a year-on-year growth of 187.1% driven by a 162% increase in vehicle deliveries and improved product mix [4][12]. - The company significantly narrowed its net loss to RMB 130 million, outperforming market expectations due to margin expansion outpacing operating expense growth [12][4]. - Leapmotor's domestic deliveries soared to 87,552 units in Q1 2025, up 162.1% year-on-year, with plans for further expansion in both domestic and international markets [5][13]. Financial Performance Summary - Revenue projections for Leapmotor are RMB 67.6 billion in 2025, RMB 81.2 billion in 2026, and RMB 102.5 billion in 2027, with net profits expected to be RMB 0.6 billion, RMB 3.5 billion, and RMB 6.0 billion respectively [7][15]. - The gross profit margin is expected to improve from 14.0% in 2025 to 18.1% in 2027, indicating a positive trend in profitability [10][15]. - The company has a strong cash position with RMB 25.7 billion in cash as of March 31, 2025, supporting its growth initiatives [12][4]. Market Position and Strategy - Leapmotor's new C10 model features significant upgrades, including a 12% increase in range and enhanced driving dynamics, which are expected to strengthen its competitive position in the market [6][14]. - The company plans to increase its sales outlets and service centers, aiming for a 90% coverage in prefecture-level cities by the end of 2025 [5][13]. - Leapmotor's strategy focuses on a closed-loop business model that leverages scale to reduce costs and enhance market share, driving further product iterations and competitiveness [6][14].