Citi Raises Li Auto Price Target, Boosts 2024 Delivery Estimates to 520k Units

Citi analyst Jeff Chung raised L Auto's price target on the stock on higher delivery estimates after a "sector sales beat" over the last two months.

This year, the analyst expects the Beijing based NEV maker to deliver 520,000 units while for 2025 and 2026 the estimates were increased to 620,000 and 690,000 units, respectively.

"After Jul/Aug24 EV sector sales beat, we expect strong EV sector sales tailwind to continue, and thus we lift Li Auto's 2024-26E sales forecast from 509.5/600/670k to 520/620/690k units, with revenue lifted by 2-3 percent to Rmb 146.7/162.4/174.9bn and 2024-26E NP forecast lifted by 7-12% to Rmb8.17/7.75/8.68bn,” the analyst wrote.

Maintaining the neutral rating on the stock, the Citi analyst raised the firm's price target from USD21.60 to USD25.50.

"By applying unchanged 1.0x 2025E PEG valuation on a 25% 2025-27E NP CAGR, we lift our TP to USD25.50/ HKD98.00 from USD21.60/HKD83.10," he added in the note before commenting on the "low sales" performance of Li Auto's pure electric vehicle model, the Mega.

"Considering the L7/8/9 aging issue and peer competition as well as low BEV sales visibility, we see the valuation of the company's stock as already at a fair level and risk/reward balanced. Maintain Neutral," Chung stated.

The company postponed the launch of its upcoming pure electric SUV following a significant redesign, new leaked spy photos in China show.

The new vehicle, originally set to debut this year, will now be introduced in the first half of 2025, according to local media IT Home which cited sources familiar with the matter.

The company is expected to reach a total of 1 million vehicles produced in late Oct.

Li Auto's L6, the cheapest model in the portfolio, starts at 249,800 yuan (USD35,200) and was responsible for over 20,000 units over the last three months.

Regarding charging infrastructure, the manufacturer closed Aug with 748 super charging stations equipped with 3,506 chargers in China.