Tianfeng: Give LI AUTO-W (02015) a "buy" rating, and it is expected that the full-year performance in 2024 will be positive.

Tianfeng released a research report stating that LI AUTO-W (02015) has a "buy" rating, with an estimated adjusted net profit of 105/148 billion yuan for the years 24/25 (compared to 139 billion yuan for the year 24). Performance in 24Q2: Total revenue for Q2 was 31.7 billion yuan, a year-on-year increase of 10.6% and a quarter-on-quarter increase of 23.6%; automobile sales revenue was 30.3 billion yuan, a year-on-year increase of 8.4% and a quarter-on-quarter increase of 25.0%. The bank believes that concerns about the future of consumer spending at the trading level caused an overselling after the financial report. In fact, automobile consumption showed a slight recovery trend in July under the stimulus of the policy for trading in old cars for new ones, and it is difficult to judge the continuity of market demand thereafter. However, the company's fundamentals for 3-4Q are expected to gradually improve, and with the accelerated introduction of subsidies and preferential policies in various regions, the overall demand side momentum is expected to increase. The bank expects the automobile gross profit margin to further increase, and believes that Ideal is expected to release elasticity in gross profit and net profit in the second half of the year. During 24Q2, Ideal delivered a total of 108,581 vehicles, an increase of 25.5% year-on-year. The market share of new energy vehicles priced above 200,000 yuan increased from 13.6% in Q1 to 14.4% in Q2, ranking first in sales among domestic automobile brands. Looking ahead, Ideal's Q3 car delivery volume is expected to be between 145,000 and 155,000, an increase of 38.0% to 47.5% year-on-year. The large interval between the figures is due to the uncertainty in macroeconomic demand in the second half of the year. Total revenue guidance is between 39.4 billion and 42.2 billion, a year-on-year increase of 13.7% to 21.6%. The overall gross profit margin target for Q3 is to return to 20%, with an expected annual research and development expenditure of less than 12 billion.