Morningstar

Li Auto Inc ADR LI

Morningstar Rating
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Stock XNAS Rating as of
$29.29 +0.47 (1.61%)
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As of Delayed Price Post-Trading: $29.23 −0.05

Company Report

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Li Auto Earnings: Vehicle Margin and Profit Missed, Amid Competition Pressure

Vincent Sun

Li Auto’s second-quarter revenue was largely in line with the firm's guidance, but net profit missed our expectation due to a soft margin. Vehicle margin of 19% declined 2 percentage points year over year due to negative impact from price promotions and sales mix shift despite a larger delivery volume. We reduce our fair value estimate to USD 32.80 per ADS (HKD 127.40 per share) from USD 37.50 (HKD 147.40), which implies a forward 2025 price/sales ratio of 1.5 times and price/earnings of 30 times. While Li Auto's shares are trading in 4-star territory, we still prefer Geely on valuation grounds.

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Price vs Fair Value

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LI is trading at a 425% premium.
Price
$28.84
Fair Value
$52.50
Uncertainty
Very High
1-Star Price
$12.70
5-Star Price
$73.10
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Li Auto’s strong product capacity, targeting family car users and focusing on the mid- to large-size SUV segment, will ensure the success of its future models, including but not limited to extended range electric vehicles, or EREVs.

Bears

Li Auto’s range-extension vehicles will face increasing pressure as the industry moves to pure electric models, while the company lacks track record in pure electric cars.

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News

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Trading Information

Previous Close Price
$28.82
Day Range
$28.65–29.61
52-Week Range
$17.44–46.44
Bid/Ask
$29.21 / $29.26
Market Cap
$31.07 Bil
Volume/Avg
11.1 Mil / 7.8 Mil

Key Statistics

Price/Earnings (Normalized)
22.84
Price/Sales
1.65
Dividend Yield (Trailing)
0.00%
Dividend Yield (Forward)
0.00%
Total Yield
—

Company Profile

Li Auto is a leading Chinese NEV manufacturer that designs, develops, manufactures, and sells premium smart NEVs. The company started volume production of its first model Li One in November 2019. The model is a six-seater, large, premium plug-in electric SUV equipped with a range extension system and advanced smart vehicle solutions. It sold over 376,000 NEVs in 2023, accounting for about 4% of China's passenger new energy vehicle market. Beyond Li One, the company expands its product line, including both BEVs and PHEVs, to target a broader consumer base.
Sector
Consumer Cyclical
Industry
Auto Manufacturers
Stock Style Box
Large Growth
Total Number of Employees
31,591
Website
https://www.lixiang.com

Competitors

Valuation

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Metric
LI
TSLA
NIO
Price/Earnings (Normalized)
 22.8496.99—
Price/Book Value
 3.5311.576.33
Price/Sales
 1.658.811.44
Price/Cash Flow
 —61.43—
Price/Earnings
LI
TSLA
NIO

Financial Strength

Metric
LI
TSLA
NIO
Quick Ratio
 1.561.240.84
Current Ratio
 1.761.911.11
Interest Coverage
 65.8925.38−36.17
Quick Ratio
LI
TSLA
NIO

Profitability

Metric
LI
TSLA
NIO
Return on Assets (Normalized)
 7.75%14.43%−17.90%
Return on Equity (Normalized)
 17.88%24.84%−99.19%
Return on Invested Capital (Normalized)
 10.81%20.04%−35.12%
Return on Assets
LI
TSLA
NIO

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