2024-05-23 06:32Investment Rating - The report assigns a "Buy" rating for the company with a target price of HKD 110, indicating a potential upside of 36% from the current price of HKD 80.7 [1][2][3] Core Insights - The company's Q1 2024 performance was below expectations, with revenue of HKD 25.63 billion, a year-on-year increase of 36.4% but a quarter-on-quarter decline of 38.6%. The net profit attributable to shareholders was HKD 590 million, down 36.3% year-on-year and down 89.5% quarter-on-quarter [1][2] - The delay in the launch of new pure electric products and a decrease in the price of the L series have led to a downward revision of future profit forecasts, with expected net profits for 2024-2026 at HKD 9.2 billion, HKD 14.8 billion, and HKD 21.1 billion respectively [1][2] - The company aims to deliver between 105,000 and 110,000 vehicles in Q2 2024, representing a year-on-year growth of 21.3% to 27.1% [1][2] Financial Performance Summary - Q1 2024 revenue reached HKD 25.63 billion, with vehicle sales contributing HKD 24.25 billion, reflecting a 32.3% year-on-year increase but a 39.9% quarter-on-quarter decline [1][3] - The gross margin for vehicle sales in Q1 was 19.3%, down 0.4 percentage points year-on-year and down 3.4 percentage points quarter-on-quarter [1][3] - The company delivered 80,000 vehicles in Q1 2024, a year-on-year increase of 52.9% but a quarter-on-quarter decline of 39% [1][3] Future Outlook - The company has adjusted its focus back to range-extended products after the unsuccessful launch of the mega model, postponing the release of a new pure electric SUV to 2025 [1][2] - The management plans to enhance operational efficiency through organizational upgrades and process optimization [1][2] - The anticipated sales growth is primarily driven by the L6 model, which has received over 41,000 orders since its launch on April 18, 2024 [1][2]