The true test will be how sustainable this run-rate is in the second half of this year, Edison Yu's team said.
Li Auto (NASDAQ: LI) today reported first-quarter earnings that beat expectations, and Deutsche Bank analyst Edison Yu's team provided their first look in a research note sent to investors.
Without further ado, here's what the team's research note had to say.
Li Auto delivered mostly strong 1Q results along with a solid volume outlook. Deliveries were already reported for 1Q at 52,584 units, leading to revenue of 18.7bn RMB, beating our 17.7bn forecast due to higher ASPs.
Impressively, while volume was toward the low-end of guidance, sales were above the high-end despite mix headwinds.
Total gross margin of 20.4% was slightly below our 20.7% estimate on softer vehicle margin of 19.8% (-20bps QoQ; vs. our 20.5%), suggesting that launch costs were heavier and/or BOM of new models may be greater than anticipated as pricing didn't flow through.
Opex of 3.5bn was below our expectation, mainly due to lower R&D, leading to higher-than-expected net profit; adjusted EPS was 1.35, easily ahead of DBe/consensus, helped by higher interest/ investment and other income (>30c benefit).
Free cash flow came in just below 7bn, materially better than anticipated, mainly due to working capital performance on payables.
Management provided solid 2Q guidance calling for 76,000-81,000 in deliveries, ahead of our 75,000 forecast, implying a small step-up from April's 25,681 units.
The company already expressed confidence in reaching 25,000-30,000 deliveries this month once the cheaper L7 and L8 "Air" trims garner a full month of availability.
The true test will be how sustainable this run-rate is in the 2H. We have seen the L9/L8 drop off somewhat in monthly volume already.
Revenue is expected to be 24.22-25.86bn RMB in 2Q, above DBe/consensus estimates and implying slightly better ASP/mix than our model.
Li Auto sees Q1 revenue beat expectations, net income up 252% from Q4
