【行业研究报告】理想汽车-1Q23 beat with sustainable profitability ahead

Ourtoppick.LiAuto’s1Q23resultsbeatourpreviousforecasts.Webelieveits
profitabilitycouldsustainwithGPM’ssequentialimprovement.Wearestillofthe
viewthatLiAutoisbestpositionedamongChineseNEVstart-ups,withthe
highestchancetobecomealong-termwinner.Apartfromitsproducts,welike
thecompany’shighself-disciplineincostsandbusinessexpansionevenasitis
muchmoreresourcefulthanbefore.
1Q23earningsbeatonlowerR&D,investmentincome.LiAuto’srevenue
in1Q23almostdoubledYoY,inlinewithourpriorforecast.GPMin1Q23
in1Q23almostdoubledYoY,inlinewithourpriorforecast.GPMin1Q23
widened0.2pptQoQto20.4%,slightlylowerthanourprojectionof20.8%,as
theagingLiOnedraggeddownGPMby1.6ppts.SG&Aexpenseswerein
line,whereasR&DexpenseswereRMB280mnlowerthanourestimates.
OPMof2.2%in1Q23wasthehighestinitshistory.Non-operatingincomein
1Q23wasaboutRMB360mnhigherthanourforecast.Accordingly,LiAuto’s
1Q23NPofRMB930mnwasaboutRMB660mnhigherthanourpriorforecast.
2Q23outlook.WeexpectLiAuto’sGPMtoimproveQoQin2Q23,with
greatereconomiesofscaleandlowerimpactfromtheLiOne,whichshould
bemorethanenoughtooffsetrisingR&Dinvestments.Therefore,weproject
asimilarOPMin2Q23Evs1Q23.WeexpectNPin2Q23Etobeatleast
similartoorevenhigherthanNPin1Q23,dependingoninvestmentreturnin
non-operatingincome.
MostcashamongNEVtrio,butstillmostself-disciplineincostsand
expansion.LiAutoisontracktoitsfull-yearsalestarget,whichisrarein2023
amidintensifyingpricewar.WeraiseourFY23Esalesvolumeforecastby6%
to0.29mnunits.LiAutoisalsowellontracktobecomethefirstChineseNEV
start-uptomakeprofit,andweraiseourFY23EnetprofittoRMB3.6bnfrom
RMB1.3bn.WearestilloftheviewthatLiAutoisbestpositionedamong
ChineseNEVstart-ups,especiallywithitshighlyself-disciplineincostcontrol
andbusinessexpansionwhenitismuchmoreresourcefulthanbefore.
Valuation/Risks.WemaintainourBUYratingandtargetpriceofUS$44.00,
stillbasedon3.0xourrevisedFY23EP/S.WeareoftheviewthatLiAutonow
shoulddeservethehighestvaluationamongtheNEVtriogivenitsprofitability
andnetcashposition.Keyriskstoourratingandtargetpriceincludeslower
autonomousdrivingdevelopment,lowersalesvolumeand/orgrossmargin
thanourexpectation,aswellasasectorde-rating.