Li Auto shares gain 20% in Hong Kong after big earnings beat, solid 2024 outlook

Li Auto’s shares
2015,
+18.58%

rose sharply in Hong Kong after the Chinese electric-vehicle maker roundly beat earnings expectations with jumps in quarterly profit and revenue on the back of rising demand for its SUVs and other cars.

Shares were 20% higher at 167.10 Hong Kong dollars (US$21.36), on track for their biggest one-day percentage gain in almost two years. The jump, which came after a steep rise in U.S.-listed ADRs
LI,
+18.79%

overnight, pulled shares into the green for the year, and took 12-month gains to 80%.

Li Auto said late Monday that fourth-quarter revenue more than doubled compared with the same period a year earlier to 41.73 billion yuan (US$5.80 billion) on a near tripling of deliveries led by its flagship SUVs. Quarterly profit doubled on year, helping push the company to its first full-year profit.

Deutsche Bank analyst Edison Yu said in a research note that higher average selling prices helped Li Auto beat revenue expectations, and described its volume outlook in the first quarter as better than expected. Li Auto guided for first-quarter deliveries of 100,000-103,000 vehicles, down from the fourth quarter but higher from a year earlier.

CCB International analyst Ke Qu called the results “very robust,” saying they were further proof of Li Auto’s “strong supply chain management capability.” He added that the expected sequential drop in first-quarter volume is likely due to the seasonal effects from Lunar New Year holidays, along with higher deliveries from up-and-coming competitor Huawei-backed Seres, whose January sales surpassed those of Li Auto’s.

Analysts also like Li Auto’s plans for releases for the rest of the year, with the company saying Monday they would launch five new models in 2024 and sell up to 800,000 units in total.

“Li Auto has a solid pipeline and business plan for 2024 and they are quite confident in shipment delivery into the following quarters,” Nomura analyst Joel Ying said. “It seems that they are well prepared for the market situation in 2024.”

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