Li Auto

Dismissing an offer or laying off employees is normal for a company, but in China, things get delicate when it comes to groups that are considered disadvantaged.

Li Auto reported solid Q1 results while Q2 guidance was somewhat soft given uncertainty around the Covid recovery cadence.

Li Auto's guidance for second quarter deliveries is 21,000-24,000 vehicles, meaning it expects 16,833-19,833 combined deliveries in May and June.

Edison Yu's team lowered their price target on Li Auto by $6 to $28, based on 3.0x 2023E EV/Sales, down from 3.5x previously.

Some of Li Auto's suppliers have completely shut down production, making it impossible to maintain production after existing parts inventories have been absorbed, it said.

Li Auto delivered 31,716 vehicles in the first quarter, which is near the upper end of the guidance range of 30,000-32,000 vehicles.

The mainland-Hong Kong stock connect includes two channels, Shenzhen and Shanghai, and Li Auto's shares traded in Hong Kong were included in the Shenzhen channel last month.

Li Auto said that inclusion on the list is not equivalent to delisting from the US and that it will not have any impact on the company's actual business operations.

The 17 companies are the fifth to be added to the list, and they have until May 12 to provide evidence to the SEC that they are not eligible for delisting.

Li Auto said it is actively working with supply chain companies to restore capacity in an effort to keep delivery delays to less than three weeks.