Morningstar

Li Auto Inc ADR LI

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Stock XNAS Rating as of
$25.78 +0.41 (1.62%)
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As of Delayed Price Closed

Company Report

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Li Auto Earnings: Vehicle Margin and Profit Missed, Amid Competition Pressure

Vincent Sun

Li Auto’s second-quarter revenue was largely in line with the firm's guidance, but net profit missed our expectation due to a soft margin. Vehicle margin of 19% declined 2 percentage points year over year due to negative impact from price promotions and sales mix shift despite a larger delivery volume. We reduce our fair value estimate to USD 32.80 per ADS (HKD 127.40 per share) from USD 37.50 (HKD 147.40), which implies a forward 2025 price/sales ratio of 1.5 times and price/earnings of 30 times. While Li Auto's shares are trading in 4-star territory, we still prefer Geely on valuation grounds.

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Price vs Fair Value

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LI is trading at a 736% premium.
Price
$25.78
Fair Value
$55.30
Uncertainty
Very High
1-Star Price
$91.70
5-Star Price
$47.40
Economic Moat
Ntzs
Capital Allocation
Hzpzyxpq

Bulls Say, Bears Say

Bulls

Li Auto’s strong product capacity, targeting family car users and focusing on the mid- to large-size SUV segment, will ensure the success of its future models, including but not limited to extended range electric vehicles, or EREVs.

Bears

Li Auto’s range-extension vehicles will face increasing pressure as the industry moves to pure electric models, while the company lacks track record in pure electric cars.

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News

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Trading Information

Previous Close Price
$25.37
Day Range
$25.12–26.78
52-Week Range
$17.44–46.44
Bid/Ask
$25.70 / $25.72
Market Cap
$27.35 Bil
Volume/Avg
13.8 Mil / 7.1 Mil

Key Statistics

Price/Earnings (Normalized)
20.43
Price/Sales
1.48
Dividend Yield (Trailing)
0.00%
Dividend Yield (Forward)
0.00%
Total Yield
—

Company Profile

Li Auto is a leading Chinese NEV manufacturer that designs, develops, manufactures, and sells premium smart NEVs. The company started volume production of its first model Li One in November 2019. The model is a six-seater, large, premium plug-in electric SUV equipped with a range extension system and advanced smart vehicle solutions. It sold over 376,000 NEVs in 2023, accounting for about 4% of China's passenger new energy vehicle market. Beyond Li One, the company expands its product line, including both BEVs and PHEVs, to target a broader consumer base.
Sector
Consumer Cyclical
Industry
Auto Manufacturers
Stock Style Box
Large Growth
Total Number of Employees
31,591
Website
https://www.lixiang.com

Competitors

Valuation

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Metric
LI
NIO
01211
Price/Earnings (Normalized)
 20.43—25.76
Price/Book Value
 3.166.165.23
Price/Sales
 1.481.401.15
Price/Cash Flow
 ——7.79
Price/Earnings
LI
NIO
01211

Financial Strength

Metric
LI
NIO
01211
Quick Ratio
 1.560.840.34
Current Ratio
 1.761.110.66
Interest Coverage
 65.89−36.1720.47
Quick Ratio
LI
NIO
01211

Profitability

Metric
LI
NIO
01211
Return on Assets (Normalized)
 7.75%−17.90%4.77%
Return on Equity (Normalized)
 17.88%−99.19%23.24%
Return on Invested Capital (Normalized)
 10.81%−35.12%16.60%
Return on Assets
LI
NIO
01211

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