Investment Rating - The report maintains an "Overweight" rating for the company [4] Core Views - The company is in a transitional phase with new and old products, awaiting the launch of pure electric models and the realization of AI technology [1] - The management has guided for a delivery volume of 123,000 to 128,000 units in Q2 2025, influenced by the clearance of old models and the ramp-up of new models [2] - The company is expected to release new pure electric SUV models i8 and i6 in July and September 2025, respectively, which may fill a market gap for electric SUVs priced above 300,000 yuan [3] Financial Performance Summary - In Q1 2025, total revenue was 25.93 billion yuan, a year-on-year increase of 1.1% but a quarter-on-quarter decrease of 41.4% [1] - The automotive business revenue in Q1 2025 was 24.68 billion yuan, with a year-on-year increase of 1.8% but a quarter-on-quarter decrease of 42.1% [2] - Non-GAAP net profit for Q1 2025 was 1.02 billion yuan, reflecting a year-on-year decrease of 20.3% and a quarter-on-quarter decrease of 74.7% [1][2] - Free cash flow for Q1 2025 was 2.5 billion yuan, with total cash on hand amounting to approximately 110.7 billion yuan [2] Profitability and Cost Structure - The gross margin for Q1 2025 was 20.5%, with a year-on-year decrease of 0.1 percentage points and a quarter-on-quarter increase of 0.2 percentage points [1] - R&D expense ratio in Q1 2025 was 9.7%, a year-on-year decrease of 2.2 percentage points [2] - Non-GAAP net profit margin for Q1 2025 was 3.9%, down 1.1 percentage points year-on-year and 5.2 percentage points quarter-on-quarter [2] Future Outlook - The company is expected to focus on the recovery of L-series sales and the ramp-up of pure electric models in 2025 [4] - The forecast for Non-GAAP net profit for 2025-2027 has been adjusted downwards by 27%, 33%, and 12% to 8 billion yuan, 12.4 billion yuan, and 17.8 billion yuan, respectively [4] - The company plans to expand into lower-tier cities, potentially adding over 100,000 units in sales by 2026 [3]