By Sherry Qin
Li Auto’s Hong Kong-listed shares slid early Wednesday as signs of slowing sales fanned investor worries that the carmaker’s earnings may have peaked, eclipsing strong second-quarter results.
Shares in the company were last down 6.6% at 165.80 Hong Kong dollars (US$21.22) after earlier touching HK$162.00, on track for their biggest one-day percentage loss since January 2022. The declines came after the quarterly results were posted Tuesday after market close, but the Chinese automaker is still up 116% so far this year.
Li Auto posted a net profit of 2.29 billion yuan ($318.3 million) for the April-June period, turning around from a loss of CNY618.0 million. Revenue surged to CNY28.65 billion from CNY8.73 billion a year earlier, driven by a tripling of vehicle sales.
Despite the results, investors are concerned that Li Auto’s earnings could have peaked, as its retail sales slowed in the first week of August, Citi analysts said in a research note.
They also seemed unimpressed by its third-quarter guidance, which looks relatively conservative, the analysts add. The company has guided for third-quarter car deliveries of between 100,000 and 103,000 units, and only at maximum production capacity. The carmaker is still grappling with production bottlenecks at one of its factories due to supply-chain issues.
The analysts added that Li Auto faces intensifying competition and pricing battles for battery-powered electric vehicles in China. They expect these headwinds to affect the company in 2024 when it launches its battery-powered EVs.
Write to Sherry Qin at [email protected]
Read the full article here
