Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The company achieved a quarterly revenue of 19.45 billion yuan in Q3 2025, representing a year-on-year increase of 97.3% and a quarter-on-quarter increase of 36.7% [7] - The company reported a net profit attributable to equity holders of 150 million yuan in Q3 2025, a significant improvement from a loss of 690 million yuan in Q3 2024 and a profit of 160 million yuan in Q2 2025 [7] - The company’s Q3 sales volume reached 174,000 units, with a year-on-year increase of 107.3% and a quarter-on-quarter increase of 29.6% [7] - The average selling price (ASP) for the company was 112,000 yuan, showing a year-on-year decrease of 4.8% but a quarter-on-quarter increase of 5.4% [7] - The gross margin for Q3 was 14.5%, reflecting a year-on-year increase of 6.4 percentage points and a quarter-on-quarter increase of 0.9 percentage points [7] - The company’s sales, management, and R&D expense ratios improved to 4.9%, 3.2%, and 6.2% respectively, compared to the previous year [7] - The company has expanded its sales service network to cover 292 cities with 866 sales outlets as of the end of September 2025 [7] - The company exported 17,000 vehicles in Q3 2025, a quarter-on-quarter increase of 36% [7] - The company plans to launch its Lafa5 model overseas in Q2 2026 and is actively pursuing local production capabilities in Malaysia and Europe [7] Financial Projections - The total revenue forecast for the company is projected to reach 65.8 billion yuan in 2025, with a year-on-year growth of 104.58% [1] - The net profit attributable to the parent company is expected to be 693.83 million yuan in 2025, with a significant year-on-year increase of 124.60% [1] - The earnings per share (EPS) is projected to be 0.49 yuan in 2025, with a P/E ratio of 103.14 [1] - The company’s gross margin is expected to improve to 15% in 2025 [8] - The company’s asset-liability ratio is projected to be 77.45% in 2025 [8]

Investment Rating - The report maintains a "Buy" rating for Leapmotor, indicating a potential return exceeding 15% over the next 12 months [4][18]. Core Insights - Leapmotor's Q1 2025 net loss of RMB 130 million exceeded previous expectations, driven by an increase in average selling price (ASP) and gross profit margin (GPM), along with unexpected contributions from strategic partnerships [1][2]. - The sales volume forecast for FY25 has been raised by 15% to 550,000 units, reflecting strong sales performance and order volume from April to May [3][4]. - The GPM for Q1 2025 improved by 1.6 percentage points to 14.9%, attributed to strategic cooperation with FAW and effective cost reduction efforts [2][3]. Financial Performance Summary - Revenue projections for FY25 have been increased to RMB 58.993 billion, with a year-on-year growth rate of 83.4% [5][13]. - The net profit forecast for FY25 has been adjusted from a loss of RMB 98 million to a profit of RMB 118 million, with significant profit growth expected in FY26 [4][13]. - The GPM for FY25 is now projected at 12.1%, up from 11.2%, reflecting enhanced cost management capabilities [3][13]. Valuation and Target Price - The target price has been raised from HKD 50.00 to HKD 72.00, based on a price-to-sales ratio of 1.5 times for FY25 [4][6]. - The report highlights a significant improvement in market sentiment and profit outlook for Leapmotor, supporting the revised target price [4][6]. Shareholder Structure - Major shareholders include Mr. Jiangming Zhu with 25.0% and Stellantis N.V. with 21.3% [7]. Stock Performance - Leapmotor's stock has shown strong performance, with a 1-month absolute return of 38.4% and a 6-month return of 106.3% [8].