LEAPMOTOR(HK:09863) CSC SECURITIES (HK) LTD·2025-08-20 02:39Investment Rating - The report assigns a "Buy" rating for the company, indicating a potential upside in the stock price [4][7]. Core Insights - The company has turned profitable in the first half of 2025, achieving a revenue of 24.25 billion RMB, a year-over-year increase of 174%, and a net profit of 33 million RMB, translating to an EPS of 0.02 RMB, which exceeded expectations [8]. - The company has sold 272,000 vehicles from January to July 2025, marking a 150% year-over-year increase, with July sales surpassing 50,000 units for the first time [10]. - The company focuses on the volume market with high cost-performance products, establishing a competitive advantage in the 100,000 to 200,000 RMB price range [8]. - The company plans to launch new models and expand sales channels, aiming for a sales target of 580,000 to 650,000 vehicles for the year [8]. Financial Performance - The company reported a significant increase in revenue and net profit in its half-year report, with Q2 revenue reaching 14.24 billion RMB, a 166% year-over-year increase, and a net profit of 163 million RMB [8]. - The gross margin for the first half of 2025 was 14.1%, up 13 percentage points year-over-year, attributed to scale effects and product structure optimization [8]. - The company has adjusted its annual sales target to 580,000 to 650,000 vehicles, with expectations to approach the upper limit of this target [8]. Future Projections - The company is projected to achieve net profits of 895 million RMB, 4.095 billion RMB, and 5.662 billion RMB for the years 2025, 2026, and 2027, respectively, with corresponding EPS of 0.67 RMB, 3.06 RMB, and 4.24 RMB [10][12]. - The current stock price corresponds to a P/E ratio of 22 for 2026 and 16 for 2027, supporting the "Buy" recommendation [10].