HTSC·2025-11-28 11:14Investment Rating - The report maintains a "Buy" rating for the company with a target price of $7.17 [7][5]. Core Insights - The company reported Q3 revenue of 21.8 billion RMB, a year-on-year increase of 17% and a quarter-on-quarter increase of 15%. The net profit attributable to shareholders was a loss of 3.7 billion RMB, with losses narrowing by 29% both year-on-year and quarter-on-quarter [1][5]. - The vehicle gross margin reached 14.7%, the highest in three years, driven by increased sales and the introduction of high-margin models like the L90. Cost control measures have also shown significant effectiveness [2][5]. - In October, the company delivered over 40,000 vehicles, marking a 92.6% year-on-year increase and setting a new monthly record. The L90 and new ES8 models are driving this growth, with the L90 becoming the top-selling large electric SUV [3][4]. Summary by Sections Q3 Performance - Q3 revenue was 21.8 billion RMB, up 17% year-on-year and 15% quarter-on-quarter. The adjusted net loss was 2.7 billion RMB, a reduction of 38% year-on-year and 34% quarter-on-quarter. For the first three quarters, revenue totaled 45.3 billion RMB, a year-on-year increase of 11% [1][2]. Vehicle Sales and Margins - The company sold 87,000 vehicles in Q3, a 41% increase year-on-year and a 21% increase quarter-on-quarter. The overall gross margin was 13.9%, with automotive gross margin at 14.7%, reflecting a significant improvement due to sales growth and cost reductions [2][3]. Future Outlook - The report is optimistic about the company's new models, particularly the L80 and the new ES7, which are expected to enhance sales and market share in 2026. The L80 is positioned as a large electric SUV, while the ES7 targets the high-end market [4][5]. Financial Projections - The revenue forecast for 2025 is adjusted to 89.6 billion RMB, a decrease of 11%. The revenue estimates for 2026 and 2027 remain at 125.5 billion RMB and 149.9 billion RMB, respectively [5][11].