Tianfeng Securities·2024-05-31 02:12Investment Rating - The investment rating for the company is "Buy" with a target price of 136 HKD, maintaining the rating after the financial report [3]. Core Views - The report highlights that the company is expected to face pressure in Q2 2024, with projected vehicle sales between 105,000 and 110,000 units, representing a year-on-year growth of 21.3% to 27.1%. Total revenue is anticipated to be between 29.9 billion and 31.4 billion RMB, reflecting a year-on-year increase of 4.2% to 9.4% [2]. - The delay in the launch of the pure electric platform is noted, with expectations for it to be pushed to the first half of 2025. The company aims to leverage fast-charging infrastructure and spatial definition to achieve good sales in the 300,000 to 500,000 RMB price range for electric vehicles [2]. - The report suggests that the market may be overly pessimistic regarding the company's annual sales and profit forecasts, as the market share has not significantly declined. With the ramp-up of the L6 model, the company's market share is expected to improve [2][3]. Summary by Sections Q1 Performance - In Q1 2024, the company reported automotive sales revenue of 24.3 billion RMB, a year-on-year increase of 32.3%, and total revenue of 25.6 billion RMB, up 36.4%. The overall gross margin was 20.6%, down from 23.5% in the previous quarter, with automotive gross margin at 19.3%. Total expenses reached 5.87 billion RMB, a 71.4% increase year-on-year, with R&D and sales expenses both at 3 billion RMB, reflecting growth of 64.6% and 81% respectively. Adjusted net profit attributable to shareholders was 1.3 billion RMB, down 9.7% year-on-year [1][2]. Sales Volume - The company delivered 80,400 vehicles in Q1 2024, a year-on-year increase of 53%. In April, the delivery volume was 25,800 units, a slight increase of 0.4% year-on-year. The report attributes the slowdown in sales growth to seasonal demand factors rather than a decline in competitive strength [1][2]. Future Growth Points - The report identifies several mid-to-long-term growth drivers: 1. The delayed pure electric platform is expected to contribute to growth once launched, targeting the 300,000 to 500,000 RMB price range. 2. International expansion plans are in place, with potential entry into the Middle East market this year. 3. The emphasis on smart technology is highlighted as a key competitive advantage for the next three years, leveraging technology and data to build product strength [2]. Adjusted Financial Projections - Following the financial report, the company adjusted its annual sales forecast to 550,000 units, with expectations for the L789 models to recover to monthly sales of 30,000 to 35,000 units, and the L6 model projected at 15,000 to 20,000 units. The revenue projections for 2024 and 2025 have been revised to 168.7 billion and 228.9 billion RMB, respectively [2].