BofA Securities: Li Auto-W's chip business bringing in external capital helps expand non-automotive business

Bank of America Securities issued a research report stating that it maintains a "Neutral" rating on Li Auto-W and a target price of HK$58.9 for its H-shares. The bank noted that Li Auto recently announced that its subsidiary MHX Technology, which focuses on chip and domain controller businesses, will conduct a RMB 1.625 billion equity financing, bringing in external investors such as Hangzhou Jingtao, Lanchi Ventures, Huaye Tiancheng and MiraclePlus. Li Auto will invest RMB 1 billion through a wholly-owned subsidiary to maintain its position as controlling shareholder and continue to consolidate MHX Technology into its financial statements. Bank of America Securities believes that MHX Technology provides a unique platform for Li Auto's chip and domain controller businesses, helping to expand opportunities in non-automotive fields, and is expected to scale its business through external commercialization. The bank will continue to monitor its R&D and commercialization progress, expansion into non-automotive applications, and whether scale can sustainable economic benefits.