Li Auto shares breakout above the 200-day despite cautious outlook

Li Auto, a leading electric vehicle (EV) manufacturer in China, reported strong Q4 earnings and sales figures for the 2023 fiscal year, driven by increased vehicle deliveries and a growing sales network. The company's shares rose 14% on the news, reflecting investor optimism about its prospects. The stock is breaking out above its 200-day moving average despite offering a conservative outlook around its Q1 revenues. 

The company exceeded earnings expectations, reporting earnings of RMB 4.23 per share, significantly higher than the analyst estimate of RMB 1.58 per share. Li Auto's revenues also demonstrated strong growth, rising 136.4% year-over-year to reach RMB 41.7 billion, surpassing the consensus estimate of RMB 39.5 billion.

In the fourth quarter of 2023, Li Auto delivered 131,805 vehicles, representing a 184.6% year-over-year increase. Vehicle sales accounted for RMB40.38 billion (US$5.69 billion), an increase of 133.8% from the same quarter in 2022. Total deliveries for the full year 2023 reached an impressive 376,030 vehicles, reflecting a substantial 182.2% increase from the previous year.

Li Auto's gross profit for the quarter was RMB9.79 billion (US$1.38 billion), representing an increase of 174.4% from the same quarter in 2022. The company's gross margin was 23.5%, compared with 20.2% in the same quarter of 2022. 

Operating expenses for the quarter were RMB6.75 billion (US$950.8 million), representing an increase of 82.4% from the same quarter in 2022. Research and development expenses increased by 68.6% to RMB3.49 billion (US$491.7 million), while selling, general and administrative expenses increased by 100.6% to RMB3.27 billion (US$460.5 million). 

For the first quarter of 2024, Li Auto expects vehicle deliveries to be between 100,000 and 103,000 vehicles, representing an increase of 90.2% to 95.9% from the same quarter in 2023. The company also expects total revenues to be between RMB31.25 billion (US$4.40 billion) and RMB32.19 billion (US$4.53 billion), representing an increase of 66.3% to 71.3% from the same quarter in 2023. This range was below analyst expectations. 

Li Auto's strong Q4 earnings and sales figures are a testament to the company's growth and success in the Chinese electric vehicle market. The company's expanding product portfolio, technologies, and sales network, as well as increased vehicle deliveries, have driven its revenue and profit growth. Despite the challenging global economic environment and increased competition in the EV market, Li Auto is well-positioned to capitalize on the growing demand for electric vehicles in China. 

Overall, Li Auto's Q4 earnings and sales report reflect the company's strong performance and potential for continued growth in the Chinese EV market. Investors and analysts will closely monitor the company's future performance and strategic initiatives as it navigates the competitive landscape and continues to expand its product offerings and sales network.