JP Morgan lowers target price for LI AUTO-W (02015) to 56 Hong Kong dollars, maintains "underweight" rating.

JPMorgan issued a research report stating that LI AUTO-W (02015) first-quarter performance roughly met market expectations, but was about 15% lower than the bank's forecast. The bank maintains a cautious long-term view on Li Auto, Inc. Sponsored ADR Class A, believing that the fiercely competitive market environment limits the potential for surprises in sales volume and profitability. The bank maintains a "neutral" rating on Li Auto, Inc. Sponsored ADR Class A, with a Hong Kong stock target price lowered from HK$60 to HK$56, and an ideal (LI.US) target price reduced from $15.5 to $14. Management proposed multiple strategies at the performance meeting, including upgrading the product portfolio. The new L9 and upcoming L8 models will strengthen the positioning of high-end SUVs, helping to gradually restore gross margins starting in the second quarter. In terms of overseas expansion, the L Series EREV has entered the Middle East and Central Asia, and will further expand to Southeast Asia from May. Pure electric vehicles (BEVs) will land in Europe in the second half of 2026, with subsequent models entering the markets of Hong Kong and Singapore. In addition, the company's self-developed M100 AI chip and VLA large model are positioned as the core of next-generation technology. However, JP Morgan pointed out that several Chinese competitors such as NIO Inc. Sponsored ADR Class A, Xiaopeng, Huawei, Xiaomi, Zhiji, and Lingpao are launching EREVs and BEVs with increasingly high overlap in price, specifications, channels, and target homebuyer demographics with ideal core products, which could impact revenue growth momentum. Price competition, promotions, and rising costs in investments may continue to put pressure on profit margins.