LEAPMOTOR(HK:09863) SINOLINK SECURITIES·2025-08-19 01:19Investment 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][3]. Core Insights - The company's performance in H1 2025 met expectations, with a notable increase in vehicle sales and revenue. The company sold 222,000 new cars in H1, a year-on-year increase of 155.7%, generating revenue of 24.25 billion yuan, up 174.2% year-on-year [1][2]. - The report highlights that despite strong sales, increased expenses and a decline in gross margin were observed. The core profit drivers include ongoing collaboration income with partners, carbon emission credits from STLA, and other income totaling 510 million yuan in H1 [2]. - Future outlook remains strong, with expectations of continued sales growth driven by new model launches and strong market demand. The company is projected to sell 577,000, 802,000, and 1,023,000 vehicles in 2025, 2026, and 2027, respectively, with corresponding revenues of 66.17 billion, 97.79 billion, and 116.87 billion yuan [3]. Summary by Sections Financial Performance - In Q2 2025, the company sold 134,000 vehicles, achieving a revenue of 14.23 billion yuan, reflecting a year-on-year increase of 165.5% and a quarter-on-quarter increase of 42% [1]. - The gross margin for Q2 2025 was reported at 13.6%, with a year-on-year increase of 10.8 percentage points, while the net profit attributable to shareholders was 160 million yuan, marking a return to profitability [1][2]. Cost Structure - The report notes a decrease in the expense ratios for sales, administrative, and R&D costs in Q2 2025, indicating improved cost management [1]. Market Position and Strategy - The company adheres to a self-research and self-supply strategy, which continues to enhance its cost advantages and product competitiveness. The report emphasizes the potential for significant profit growth from carbon emission credits and partnerships in the coming years [3].