Guolian Minsheng: Maintains "Buy" rating on LI AUTO-W(02015) with strong gross profit margin resilience.

Guolian Minsheng released a research report stating that the company's sales and profitability are affected by intensified industry competition. It is expected that LI AUTO-W (02015) will have operating revenues of 123.9/190.3/220.8 billion yuan from 2025 to 2027, with year-on-year growth rates of -14.3%/53.6%/16.0% respectively. Net profit attributable to the parent company is expected to be 6.74/12.40/14.85 billion yuan, with year-on-year growth rates of -16.1%/84.0%/19.8% respectively, and EPS of 3.15/5.79/6.94 yuan per share. The "buy" rating is maintained. The main points of Guolian Minsheng are as follows: Events Li Auto released its second quarter financial data. Li Auto delivered 111,000 vehicles in 2025Q2, an increase of 2.3% year-on-year, with total operating revenue of 30.2 billion yuan, an increase of 16.7% compared to the previous quarter and a decrease of 4.5% year-on-year. Li Auto achieved a net profit attributable to the parent company of 1.09 billion yuan in 2025Q2, and a non-GAAP net profit attributable to the parent company of 1.46 billion yuan. Short-term pressure on deliveries and revenue in Q2/Q3 due to increased competition Li Auto delivered a total of 111,000 vehicles in 2025Q2, an increase of 2.3% year-on-year and 19.6% quarter-on-quarter. Total revenue for 2025Q2 was 302.5 billion yuan, an increase of 4.5% year-on-year and 16.7% quarter-on-quarter, with automotive sales revenue for 2025Q2 at 288.9 billion yuan, a decrease of 4.7% year-on-year and an increase of 17.0% quarter-on-quarter. The year-on-year decrease was mainly due to product structure adjustments and financial service subsidies. Li Auto released the pure electric SUV Li X8 in July with a range of 720 kilometers and a price of 339,800 yuan. Deliveries began in August and are expected to reach 8,000 to 10,000 units by the end of September. Looking ahead to 2025Q3, Li Auto expects to deliver 90,000-95,000 vehicles in Q3 of 2025, with revenue of 24.8-26.2 billion yuan, a decrease of 42.1%-37.8% year-on-year, mainly due to intensified industry competition. With the launch of new vehicle models in Q4, revenue pressures are expected to ease. Strong resilience in gross margin, high R&D investment ensures AI progress Li Auto's gross margin in 2025Q2 was 20.1%, an increase of 0.6 percentage points year-on-year and a decrease of 0.4 percentage points from the previous quarter. The gross margin for automotive business was 19.4%, an increase of 0.7 percentage points year-on-year and a decrease of 0.4 percentage points from the previous quarter. The overall gross margin performance was strong, mainly due to the company's strong cost control and relatively complete Li-mos production management system. R&D expenses/SG&A for Li Auto in 2025Q2 were 2.81/2.72 billion yuan, with R&D expenses/SG&A ratio of 9.3%/9.0%. Li Auto maintains high R&D investment, and the progress of its VLA may become a key step in accelerating its AI layout. Gradual improvement of pure electric ecosystem, or ensure company's subsequent pure electric sales As of August 31, 2025, Li Auto has 543 retail centers nationwide, covering 156 cities, with 536 authorized service and repair centers and 222 cities for authorized sheet metal spray centers. Li Auto has put into operation 3,190 Li Supercharging stations nationwide, with 17,597 charging piles. Risk warning: The speed of intelligent landing and the realization of sales may not meet expectations; price wars in passenger cars may affect subsequent sales.