Summary of Li Auto Conference Call Company Overview - **Company**: Li Auto - **Industry**: Electric Vehicles (EV) Key Points and Arguments 1. **Sales Performance**: Li Auto's weekly order volume is strong following the L series facelift, with expectations for sales peaks in May-June and July-August. The range-extended series is stable, with monthly sales projected to remain above 40,000 units, although potential impacts from the end-of-year tax reduction on demand for next year should be monitored [2][5][6] 2. **New Electric Models**: The company is optimistic about the upcoming pure electric models, I8 and I6, with I8 expected to sell around 5,000 units monthly after its July launch. This model is anticipated to attract existing Li ONE users looking to upgrade, as competition in this price segment is relatively low [2][4][5][6] 3. **Overall Sales Growth**: With the introduction of I8 and I6, Li Auto's overall monthly sales could increase from 40,000-50,000 units to 55,000-60,000 units, significantly enhancing profitability. If the company achieves a quarterly sales target of 160,000 units, it could correspond to a non-GAAP profit of 4 billion, leading to a potential annual profit of 15 billion [2][7] 4. **Valuation Potential**: The company’s valuation could reach at least 20 times PE if self-driving advancements progress well. If the new models succeed, a valuation of 30 times PE is possible. The first quarter report may present a buying opportunity due to previous pessimistic sales expectations [2][7] 5. **Investment in AI Technology**: Li Auto is heavily investing in AI technology to enhance autonomous driving capabilities and is implementing an end-to-end large model strategy aimed at delivering a transformative driving experience. This focus on AI is a critical strategic direction for the company's future [2][3][8] 6. **Strategic Changes Post-Megachem**: After reflecting on the challenges faced with Megachem, Li Auto has undergone strategic changes, including a strong commitment to AI and improvements in its high-voltage pure electric product lineup and charging infrastructure, which are expected to bolster market competitiveness and create valuation opportunities [3][8] Additional Important Content - **Market Recognition**: The market has a favorable view of Li Auto's fundamentals, which is crucial for the success of the new electric product cycle in 2025. Despite setbacks from the previous year, the management's strategic adjustments are expected to drive long-term growth and profitability [4][5]

Investment Rating - The report maintains a "Buy" rating for the company with a target price raised to HKD 132, indicating a potential upside of 26% from the current price of HKD 105.1 [6][4] Core Insights - The company reported a revenue of RMB 144.46 billion for 2024, representing a year-on-year growth of 16.6%, while net profit decreased by 31% to RMB 8.03 billion [2][4] - The key focus for the second half of 2024 will be the launch of new electric models I8 and I6, along with the application of the next-generation autonomous driving architecture, Mind VLA [4][3] Financial Performance - In Q4 2024, the company achieved a revenue of RMB 44.3 billion, showing a year-on-year increase of 6.1% and a quarter-on-quarter growth of 3.3% [2] - The net profit for Q4 2024 was RMB 3.5 billion, reflecting a quarter-on-quarter increase of 25.3% but a year-on-year decline of 38.6% [2] - The company anticipates Q1 2025 sales volume to be between 88,000 and 93,000 units, which corresponds to a year-on-year growth of 9.5% to 15.7% [2] Product Launches - The I8 model, a six-seat mid-size SUV, is set to debut at the Shanghai Auto Show at the end of April and will be launched in July [4] - The I8 will feature a 102.7 kWh battery from CATL and support 5C fast charging technology, allowing for a 500 km range in just 10 minutes [4] - The I6 is planned for release in the fourth quarter of 2024, further expanding the company's electric vehicle lineup [4] Market Position and Strategy - As of February, the company delivered 26,000 vehicles, marking a year-on-year growth of 29.7%, although there was a month-on-month decline of 12% due to the shortened delivery cycle during the Spring Festival [3] - The company has established a robust charging network with 1,874 Ideal Supercharging stations and 10,000 charging piles across 150 cities [3]