Li Auto Reports Mixed Q2 Results; Shares Gain 2.9%

Li Auto (LI) has reported mixed results for the second quarter of 2021 with earnings missing the Street’s estimate but revenues beating the same. Shares of the China-based electric vehicle (EV) manufacturer gained 2.9% in early trade on Monday.

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The company reported adjusted net loss per ADS of RMB0.07 ($0.01), wider than analysts’ expectations of a loss of RMB0.04. The figure, however, compares favorably with a net loss of RMB1.25 ($0.19) per ADS in the same quarter last year.

Total revenues surged 158.8% year-over-year to RMB5.04 billion ($780.4 million) from RMB1.95 billion ($300 million), surpassing the Street’s expectations of RMB4.41 billion ($680 million). The upside can be attributed to a 155.5% rise in vehicle sales.

Deliveries of Li ONEs stood at 17,575 vehicles in the second quarter, up 166.1% year-over-year. (See Li Auto stock charts on TipRanks)

Research and development expenses increased significantly to RMB653.4 million ($101.2 million) from RMB201.4 million ($31.14 million) in the year-ago quarter. General and administrative costs rose 256% to RMB835.3 million ($129.14 million).

The CFO of Li Auto, Tie Li, said, “With the completion of our global offering and dual primary listing, we successfully raised over US$1.5 billion in net proceeds, positioning us well for future growth. We expect our enhanced product lineup and increased deliveries following production ramp-up to help us continue to deliver strong results.”

For the third quarter of 2021, the company expects to post revenues between RMB6.98 billion ($1.08 billion) and RMB7.25 billion ($1.12 billion), representing year-over-year growth of 177.8% to 188.9%. It further anticipates vehicle deliveries to be in the range of 25,000 to 26,000, up 188.7% to 200.2% from the year-ago quarter.

On August 2, Bank of America Securities analyst Ming-Hsun Lee maintained a Buy rating on the stock with a price target of $39 (upside potential of 32.9% from current levels).

For Li Auto, Lee expects 47% CAGR in volume sales over 2020-2025 on the back of rising EV penetration and robust demand on luxury/premium segment, solid new model pipeline, fast point of sales expansion and extended-range EV.

Overall, the Street is bullish on the stock with a Strong Buy consensus rating based on 5 unanimous Buys. The average Li Auto price target of $47.33 implies upside potential of about 61.3% from current levels.

TipRanks data shows that financial blogger opinions are 100% Bullish on LI, compared to the sector average of 72%.