LEAPMOTOR(HK:09863)2025-09-04 15:08Summary of Zhejiang Leapmotor Technology Conference Call Company Overview - Company: Zhejiang Leapmotor Technology - Industry: Electric Vehicle (EV) Manufacturing - Market Focus: Mid- to high-end segments of China's NEV market, with a price range of Rmb150,000-300,000 [10][10] Key Points from the Conference Call Sales Targets - Domestic Sales Target for 2026: 1 million units [2][3] - Overseas Sales Target for 2026: 100,000 to 150,000 units [2][4] Product Launch Strategy - New Model Launches: Management plans to introduce 4-5 new models in 2026, including: - Two A-series models priced between Rmb50,000-100,000 - Two D-series models priced between Rmb200,000-300,000 [3][3] - Expected Contributions: - Existing models (C10, C11, B10) to contribute 10,000 units each per month - New A-series models to achieve 25,000 units in total average monthly sales - New D-series models to achieve 15,000 average unit sales per month [3][3] Sales Performance - Recent Sales Figures: Leapmotor recorded 57,000 unit sales in August, with 6,000 units sold overseas [4][4] - Volume Drivers: EREV and PHEV models are expected to be the main volume drivers in overseas markets, particularly in South America [4][4] Financial Valuation - Current Stock Valuation: Trading at 0.8x 2026E Price/Sales (P/S) compared to competitors: - XPeng: 1.5x - Li Auto: 0.9x - Nio: 0.8x [5][5] Financial Metrics - Market Capitalization: HK$90.4 billion (approximately US$11.6 billion) [6][6] - Price Target: HK$25.00 with a current price of HK$64.25, indicating a "Sell" rating [6][6] - Revenue Forecast: Expected revenues to grow from Rmb12,385 million in 2022 to Rmb47,156 million in 2025E [8][8] Profitability and Risks - Profitability Outlook: Expected EBIT margin improvement from -42.2% in 2022 to 2.7% by 2029E [8][8] - Risks: - Upside risks include stronger-than-expected demand and favorable policy support [11][11] - Downside risks include weaker demand, increased competition, and reduced government subsidies [12][12] - Sector Risks: Changes in NEV policies, potential overcapacity in the battery industry, and new market entrants could impact profitability [13][13] Analyst Ratings - 12-Month Rating: Sell [6][6] - Forecast Stock Return: -61.1% with a market return assumption of 11.1% [9][9] Conclusion Zhejiang Leapmotor Technology is positioning itself for significant growth in both domestic and international markets through new model launches and strategic sales targets. However, the company faces considerable risks from market competition and regulatory changes, leading to a cautious outlook from analysts.