Key Takeaways:
Li Auto reported a second consecutive quarterly net loss of RMB1.7 billion ($251 million) as deliveries fell 11.5% year-over-year to 98,330 vehicles.
"We anticipate further margin expansion for the second half of the year as our product mix optimizes, with a higher sales contribution from the Livis trim and the launch of refreshed BEV models and Li i9," CFO Tie Li said.
Revenue fell 15.1% to RMB25.7 billion ($3.8 billion), with vehicle sales down 16.7% to RMB24.1 billion. Gross margin contracted to 11.0% from 20.1% a year earlier, while vehicle margin slipped to 9.4% from 19.4%. Non-GAAP diluted loss per ADS was $0.22, compared with earnings of $1.37 a year earlier.
The loss points to sustained demand weakness in China's price-competitive new energy vehicle market, where rivals NIO and XPeng are also fighting for share. Li Auto guided third-quarter deliveries of 95,000 to 100,000 vehicles, up 1.9% to 7.3% year-over-year, and revenue of RMB26.6 billion to RMB28.0 billion.
Operating loss widened to RMB2.3 billion from RMB827 million income a year earlier, as operating expenses stayed flat at RMB5.1 billion. Operating cash flow turned positive at RMB15 million, versus RMB3 billion of cash used a year earlier, while free cash flow remained negative at RMB1.3 billion.
The company spent HK$2.1 billion and $150.9 million on share repurchases in the second quarter, using about $631.5 million of its $1 billion buyback program. Cash reserves stood at RMB87.5 billion ($12.9 billion) at the end of June.
Li Auto launched the all-new Li L8 in June and the refreshed Li L6 in July, and plans to unveil the next-generation Mega MPV on September 2 and the Li i9 later this year.
Analysts hold a median price target of $15.50 on the stock, according to recent notes from HSBC's Yuqian Ding ($15.60), Barclays' Jiong Shao ($14.00) and JP Morgan's Nick Lai ($15.50). GuruFocus' GF Value metric pegs Li Auto's intrinsic value at $21.71 per share, implying the stock, near $12.28, trades about 43.5% below that estimate.
The second straight loss tests investor patience with Li Auto's turnaround timeline. The September 2 Mega MPV launch will show whether refreshed models can reverse the delivery slide.
This article is for informational purposes only and does not constitute investment advice.
