Zhitong Finance APP learned that Guotou Securities published a research report stating it maintains a "buy-A" rating for Li Auto-W (02015), expecting the company's net income attributable to the parent company for 2024-2026 to be 8, 15.4, and 26.4 billion yuan respectively, with a target price of 142.58 HKD. The company delivered 0.049 million vehicles in November, representing an 18.8% year-on-year increase and a 5.3% decrease compared to the previous month; from January to November 2024, the company has cumulatively delivered 0.442 million new vehicles. To meet the full-year delivery guidance of 0.502-0.512 million disclosed in the third quarterly report, it needs to deliver more than 0.06 million units in December.

Key points from Guotou Securities are as follows:

The bank believes the main reason for the decline in deliveries in November is:

1) Increased competition from competitor products and intensified market competition; 2) According to the public earnings conference of the third quarterly report, L6's current production capacity cannot meet order demand, and the factory will accelerate expansion in time for the 2025 Spring Festival to meet order needs. From the retail data, for the range-extended series, the average weekly sales of L6 for the first three weeks of November were about 6000 units, while the combined average weekly sales of L7/8/9 were about 5578 units. On November 29, a three-year 0% interest plan for the entire series was launched, which is expected to drive up December sales; sales of pure electric products remained basically stable, with MEGA's average weekly sales being about 197 units. The bank believes that as product reputation gradually accumulates and the supercharging station layout continues to improve, future sales are expected to break through.

The sales channels and service networks continue to upgrade. As of the end of November, Li Auto has 475 retail centers nationwide, 451 after-sales maintenance centers and authorized body spray centers, an increase of 7 from the end of October.

Outlook: The range-extended series is expected to rebound, and the pure electric series has significant sales potential.

1) The range extension series is expected to see a rebound in sales and an optimization in the sales structure: the company focuses on the L series, with an expanded equity; the sales of the L series are likely to rebound. According to the sales announcement, in November, over 0.3 million and over 0.4 million models' ADMAX order proportions have exceeded 70% and 80% respectively. On November 28th, the delivery was fully pushed with OTA 6.5, and the intelligent driving upgrade is expected to continue optimizing the sales structure.

2) The pure electric series is solidly positioned and is expected to initiate a large product cycle: on the infrastructure side, as of the end of November, 1,135 supercharging stations and 5,680 charging stations have been set up, an increase of 131 and 770 respectively since the end of October; on the vehicle side, the company is solidly establishing high-voltage fast charging technology, and the MEGA product is very strong. After reversing strategies and managing at a pace from 0 to 1, sales are likely to break through, with significant sales potential after the launch of pure electric new products in 2025.

Risk warning: risks of increased competition in the industry, risks that cost reductions in the supply chain may not meet expectations, and risks that the pace of vehicle launches may fall short of expectations.