【行业研究报告】理想汽车-4Q22E net profit likely to turn positive

Ourtoppick.WeprojectLiAuto’snetprofittobeRMB205mnin4Q22Eamid
record-highquarterlysalesvolume.WealsoexpectLiAuto’sprofitabilitytobe
moresustainableinFY23E,althoughwearemoreconservativethanconsensus
byaccountingfortheoverallindustryheadwinds.WebelieveLiAutoisstillbest
positionedamongtheNEVtriotobealong-termwinner,intermsofsalesand
profitability.
4Q22Eearningspreview.Similarto4Q20and4Q21,weexpectLiAuto’snet
profitin4Q22Etoturntopositiveterritoryagainamidrecord-highquarterly
profitin4Q22Etoturntopositiveterritoryagainamidrecord-highquarterly
salesvolume.Weprojectitsgrossmargintobe21.9%in4Q22E,whichcould
resultinRMB205mnforthenetprofitbyourestimates.
FY23Eoutlooklargelyunchanged.WemaintainourpreviousFY23Esales
volumeforecastof0.25mnunitsforLiAutoandgrossmarginof22%.Wealso
projectLiAuto’sR&DandSG&Aexpensestobeabout11%and12%ofits
revenueinFY23E,respectively.Accordingly,weforecastitsFY23Enetprofit
tobeRMB568mn,thefirstNEVstart-upinChinatoturnprofitableonour
estimates.
StillbestpositionedinNEVtrio.AlthoughourFY23Eprojectionismore
conversativethanBloombergconsensustoaccountforindustryheadwinds,
webelieveLiAutoisstillbestpositionedamongtheNEVtrio,withthehighest
chancetobecomealong-termwinner.Our0.25mn-unitsalesvolumeforecast
isalsolowerthanthemanagement’sguidance,aswebelieveChina’sNEV
salesin1Q23couldbeweakerthanmarketexpectation,especiallywith
decliningnewordersinNov-Dec2022forleadingNEVplayers.
Valuation/Risks.WemaintainourBUYratingandtargetpriceofUS$44.00,
whichisstillbasedon3.3xourFY23EP/S.Keyriskstoourratingandtarget
priceincludeslowerautonomousdrivingdevelopment,lowersalesvolume
and/orgrossmarginthanourexpectation,aswellasasectorde-rating.