LEAPMOTOR(HK:09863)2025-08-18 12:00Financial Data and Key Metrics Changes - In the first half of 2025, the company achieved a net profit of 30 million RMB, marking its first interim profitability and becoming the second EV startup to do so [6][9] - The gross profit margin reached a historical high of 14.1% in the first half of 2025, attributed to economies of scale, cost management, and product mix optimization [6][8] - Total income for the first half was 24.25 billion RMB, with operating net cash increasing to 2.86 billion RMB compared to 270 million RMB in the same period of 2024 [9][10] - Free cash flow improved to 860 million RMB from a negative 480 million RMB year-on-year [9] Business Line Data and Key Metrics Changes - Total sales in the first half of 2025 were 221,664 units, a 155.7% increase compared to the same period in 2024, making the company the top startup EV brand in China [10] - In July 2025, deliveries reached a new high of 50,129 units, maintaining the number one position for five consecutive months [10][11] Market Data and Key Metrics Changes - The company expanded its sales network to cover 286 cities, an increase of 88 cities from the previous year, with 806 sales outlets established [19][20] - In June 2025, the company's market share in Germany exceeded 1%, with over 4,000 orders placed by European users in July [25][26] Company Strategy and Development Direction - The company plans to continue investing in R&D, with a focus on smart driving technologies and expanding its product lineup [15][16] - The company aims to achieve localized production in Europe and Malaysia by 2026, enhancing its global market presence [27][71] - The strategy includes deepening market penetration in tier three to tier five cities in China, capitalizing on the growing demand for new energy vehicles [66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a revised full-year sales guidance of 580,000 to 650,000 units, based on strong performance in the first half and positive outlook for the second half [33][34] - The company anticipates a slight increase in gross profit margin in the second half, aiming for around 15% as it scales operations [49][50] - Management noted that the impact of the removal of the new energy vehicle purchase tax would be minimal, similar to the previous year's experience with subsidy removal [90][92] Other Important Information - The company has received an MSCI ESG double A rating for its commitment to environmental protection and corporate governance [28] - The company is exploring capital collaboration opportunities to enhance industrial resource synergies [24] Q&A Session Summary Question: What is the sales outlook for August and September? - Management expects significant growth in sales for August and September, with Q3 sales projected to be between 170,000 to 180,000 units [33] Question: What is the outlook for gross profit margin in subsequent quarters? - Management believes the gross profit margin will improve in the second half compared to the first half, maintaining above 14% [34] Question: How does the company plan to handle pricing strategy amid regulatory changes? - The company supports government efforts to curb industry chaos and will not engage in excessive competition, maintaining a strong gross profit margin through cost control [40][41] Question: What is the guidance on expenses as sales grow? - Management indicated that while absolute expenses are rising, the expense ratio is dropping rapidly due to increased sales revenue [43] Question: What are the expectations for overseas sales and carbon credit purchases? - Management expects overseas sales to double next year, with Stellantis likely to continue purchasing carbon credits [44][47] Question: How will the removal of the purchase tax impact sales and profitability? - Management anticipates minimal impact on sales due to the removal of the purchase tax, similar to the previous year's experience with subsidy removal [90][92]