Core Viewpoint - The performance of Leap Motor in H1 2025 is in line with expectations, showing significant growth in sales and revenue, while also achieving profitability for the first half of the year [1][2] Financial Performance - In Q2 2025, Leap Motor sold 134,000 new vehicles, representing a year-on-year increase of 151.7% and a quarter-on-quarter increase of 53.2% [1] - Total revenue for Q2 2025 reached 14.23 billion yuan, with year-on-year growth of 165.5% and quarter-on-quarter growth of 42% [1] - The average selling price (ASP) per vehicle in Q2 2025 was 106,000 yuan, showing a year-on-year increase of 10.6% but a quarter-on-quarter decrease of 7.3% [1] - For H1 2025, total vehicle sales reached 222,000 units, a year-on-year increase of 155.7%, with total revenue of 24.25 billion yuan, up 174.2% year-on-year [1] - The gross margin for Q2 2025 was 13.6%, with a year-on-year increase of 10.8 percentage points but a quarter-on-quarter decrease of 1.3 percentage points [1] - The net profit attributable to shareholders in Q2 2025 was 160 million yuan, marking a return to profitability compared to the previous quarter [1] Operational Analysis and Outlook - The company is expected to maintain strong performance throughout the year, driven by the momentum from new model launches and year-end sales push [2] - The years 2025-2026 are anticipated to be significant for new vehicle launches, with a high probability of successful products due to strong in-house development capabilities [2] - Additional revenue streams from carbon emission credits, partnerships, and component sales are expected to contribute to profit growth in 2025-2026 [2] Profit Forecast, Valuation, and Rating - The company maintains sales forecasts of 577,000, 802,000, and 1,023,000 units for 2025, 2026, and 2027, respectively, with corresponding revenues of 66.17 billion, 97.79 billion, and 116.87 billion yuan [2] - Projected net profits for the same years are 920 million, 4.55 billion, and 7.2 billion yuan, with price-to-earnings ratios of 99.2, 20.0, and 12.7 times [2] - The company’s performance is in line with expectations, and there is a high certainty of marginal improvement in H2 2025, leading to a maintained "buy" rating [2]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [1][3]. Core Insights - The company's performance in H1 2025 met expectations, with a notable increase in vehicle sales and revenue. The company sold 222,000 new cars in H1, a year-on-year increase of 155.7%, generating revenue of 24.25 billion yuan, up 174.2% year-on-year [1][2]. - The report highlights that despite strong sales, increased expenses and a decline in gross margin were observed. The core profit drivers include ongoing collaboration income with partners, carbon emission credits from STLA, and other income totaling 510 million yuan in H1 [2]. - Future outlook remains strong, with expectations of continued sales growth driven by new model launches and strong market demand. The company is projected to sell 577,000, 802,000, and 1,023,000 vehicles in 2025, 2026, and 2027, respectively, with corresponding revenues of 66.17 billion, 97.79 billion, and 116.87 billion yuan [3]. Summary by Sections Financial Performance - In Q2 2025, the company sold 134,000 vehicles, achieving a revenue of 14.23 billion yuan, reflecting a year-on-year increase of 165.5% and a quarter-on-quarter increase of 42% [1]. - The gross margin for Q2 2025 was reported at 13.6%, with a year-on-year increase of 10.8 percentage points, while the net profit attributable to shareholders was 160 million yuan, marking a return to profitability [1][2]. Cost Structure - The report notes a decrease in the expense ratios for sales, administrative, and R&D costs in Q2 2025, indicating improved cost management [1]. Market Position and Strategy - The company adheres to a self-research and self-supply strategy, which continues to enhance its cost advantages and product competitiveness. The report emphasizes the potential for significant profit growth from carbon emission credits and partnerships in the coming years [3].