Guotai Junan International maintains a "buy" rating on LEAPMOTOR (09863) and raises the target price to HKD 52.4.

Guotai Junan International released a research report, maintaining a "buy" rating for LEAPMOTOR (09863) with a target price raised from the original level to 52.4 Hong Kong dollars. The company's performance in the fourth quarter of last year generally met the bank's expectations, and this year's sales guidance and full-year profit situation are better than the bank's forecast. The company's current market-to-sales ratio is 0.9 times, with valuation having room for upward revision, making it more attractive compared to comparable new energy vehicle valuations, maintaining it as the industry leader. Based on performance and guidance, the bank has raised its sales and profit forecasts for Zero Run in the next two years. The report points out that looking ahead to this year, the annual models of the Zero Run C series, mid-term facelifts, and the three new B series models are expected to drive annual car sales to exceed 500,000 units. Zero Run's self-developed core automotive electronic components capability, combined with the LEAP3.5 architecture, will provide support for the company's target of over 10% gross margin. With excellent cost management capabilities and operational leverage, Zero Run is expected to strive for profitability for the whole year. Zero Run International is expected to achieve a balance between profits and losses while driving sales growth.