Li Auto squeezed by rising costs, lower prices
By Steve Goldstein
Li Auto on Wednesday reported a sharp decline in profit in the second quarter as the Chinese carmaker reported a surge in costs as it cut prices due to intense competition.
Li Auto (LI) (HK:2015) said its profit fell 52% to 1.1 billion renminbi ($152 million), even as revenue rose 11% to 31.68 billion renminbi. Its adjusted earnings per U.S.-listed share fell 45% to 1.42 renminbi.
Analysts polled by Visible Alpha expected earnings of 1.05 renminbi per share on revenue of 32.76 billion renminbi.
Its vehicle margin fell to 18.7% from 21% in the year-earlier period. Its CFO, Tie Li, said as the Li L6 production stabilizes and its cost reduction and efficiency enhancement measures take full effect, it expects margins and cash flow to improve in the second half of the year.
The L6 is its five-seat family sport utility vehicle.
"The L6 now makes up most of their sales, while the pricier L8 and L9 models are lagging behind. This could mean a slight dip in profit margins," said Rosalie Chen, analyst at Third Bridge.
Li Auto shares tumbled 11% in early trade, and the stock has lost have of its value this year.
-Steve Goldstein
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
08-28-24 0941ET
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