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Li Auto Inc. (LI) – Chinese EV giant set to report earnings Monday morning

AInvestFriday, Feb 23, 2024 4:04 pm ET
2min read

Li Auto Inc. (LI) is a leading electric vehicle (EV) manufacturer in China, known for its innovative EREV powertrain technology. The company has consistently achieved ambitious targets on volume and costs, establishing itself as a top-tier player in the EV market. 

LI will report its Q4 and Full Year earnings results Monday before the market opens. Analysts expect LI to report earnings of CNY3.17 on revenue of CNY 39.71 billion. Investors will be monitoring commentary around the Chinese economy as well as overall demand for the EV industry. 

In late November, Li Auto's stock experienced a 32% decline to a multi-month low of $26.43. The stock has since shown signs of recovery as it rallies back to test resistance at the 20- and 50-day convergence level $33-35).

Deutsche Bank upgraded the stock on February 6 to a Buy rating, citing a robust product pipeline and an attractive valuation for a top-tier EV player. The management team's track record of embracing cutting-edge technology and achieving ambitious targets is a testament to its excellence.

Li Auto reported a 105.8% year-over-year increase in deliveries for January 2024, with cumulative deliveries reaching 664,529 by the end of the month. In December, the company delivered over 50,000 vehicles, more than doubling the figure from the previous year. Xpeng and Nio, two of Li Auto's competitors, also reported solid delivery figures, with Xpeng delivering over 20,000 vehicles and Nio delivering 18,000. 

Total deliveries in 2023 increased by 182.2% year over year to 376,030. As of December 31, 2023, Li Auto's cumulative deliveries surpassed 600,000 vehicles, the highest among Chinese emerging new energy automakers.

While Li Auto and its competitors have demonstrated strong growth, lingering growth concerns persist in China, particularly in the troubled real estate sector. However, Li Auto remains optimistic, announcing plans to officially launch its high-tech flagship family MPV, Li MEGA, on March 1, 2024, with deliveries expected to begin in early March. 5. 

China's passenger vehicle sales shrank 14.1% in January from the prior month, the first such slide since August, data from the China Passenger Car Association (CPCA) showed on Thursday. Sales totalled 2.05 million units, up 57.1% from a year earlier.

Battery electric vehicle sales sagged 37% in January from the month before, far below expectations, a main source of pressure on auto market growth. Investors will be closely watching management"s commentary around this issue. 

Li Auto's Forward P/E ratio currently stands at 18.91, representing a premium compared to its industry's average Forward P/E of 6.22. This premium valuation suggests that investors are optimistic about the company's growth prospects and profit-generating abilities. 

Li Auto Inc. (LI) presents an attractive investment opportunity for investors seeking exposure to the growing EV market in China. The company's proven track record, robust product pipeline, and attractive valuation make it a compelling choice for those looking to capitalize on the EV revolution. As investors monitor the company's upcoming earnings report and analyst estimate revisions, it is essential to keep in mind the latest market dynamics and trends. By staying informed and making data-driven decisions, investors can make the most of the investment potential in Li Auto Inc.

$LI(LI)

Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.