Latest news with #LiAutoInc
Yahoo
6 hours ago
- Automotive
- Yahoo
Li Auto Inc (LI) Q1 2025 Earnings Call Highlights: Navigating Growth Amidst Challenges
Total Revenue: RMB25.9 billion ($3.6 billion), up 1.1% year-over-year, down 41.4% quarter-over-quarter. Vehicle Sales Revenue: RMB24.7 billion ($3.4 billion), up 1.8% year-over-year, down 22.1% quarter-over-quarter. Gross Profit: RMB5.3 billion ($732.9 million), up 0.6% year-over-year, down 40.7% quarter-over-quarter. Gross Margin: 20.5%, compared to 20.6% in the same period last year and 20.3% in the prior quarter. Vehicle Margin: 90.8%, compared to 90.3% in the same period last year and 19.7% in the prior quarter. Operating Expenses: RMB5 billion ($695.5 million), down 14% year-over-year, down 4.2% quarter-over-quarter. R&D Expenses: RMB2.5 billion ($346.4 million), down 17.5% year-over-year, up 4.4% quarter-over-quarter. SG&A Expenses: RMB2.5 billion ($348.8 million), down 15% year-over-year, down 17.7% quarter-over-quarter. Income from Operations: RMB271.7 million ($37.4 million), compared to a loss of RMB584.9 million in the same period last year. Net Income: RMB646.6 million ($89.1 million), up 9.4% year-over-year, down 81.7% quarter-over-quarter. Diluted Net Earnings per ADS: RMB0.62 ($0.08), compared to RMB0.56 in the same period last year. Cash Position: RMB110.7 billion ($15.3 billion) as of March 1, 2025. Free Cash Flow: Negative RMB2.5 billion (negative $348.7 million), compared to negative RMB5.1 billion in the same period last year. Vehicle Deliveries: Over 92,000 vehicles in Q1 2025, a 15.5% increase year-over-year. Retail Stores: 500 stores in 151 cities as of April 30, 2025. Supercharging Stations: 2,350 stations with over 12,800 charging stalls. Warning! GuruFocus has detected 3 Warning Signs with BOM:514162. Release Date: May 29, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Li Auto Inc (NASDAQ:LI) delivered over 92,000 vehicles in Q1 2025, marking a 15.5% year-on-year increase. The company achieved a 14.1% market share in the RMB200,000 and above NEV market in China, reinforcing its leadership position. Li Auto Inc (NASDAQ:LI) launched the new Li MEGA and Li L Series, featuring advanced technologies like NVIDIA's Thor-U chip and AT LiDAR sensors. The company has built the largest urban highway supercharging network in China, with 2,350 supercharging stations and plans to expand to 4,000 by year-end. Li Auto Inc (NASDAQ:LI) maintains a strong cash position with RMB110.7 billion ($15.3 billion) as of March 2025. Total revenues in Q1 2025 were down 41.4% quarter-over-quarter, primarily due to seasonal factors like the Chinese New Year holiday. The company's net income decreased by 81.7% quarter-over-quarter, despite a year-over-year increase. Free cash flow was negative RMB2.5 billion in Q1 2025, compared to positive RMB6.1 billion in the prior quarter. Li Auto Inc (NASDAQ:LI) faces competitive pressure as competitors aggressively benchmark the L Series with competitive pricing and specifications. The company anticipates challenges in maintaining vehicle margins around 19% due to the transition to new models and production adjustments. Q: How does Li Auto plan to maintain its growth in vehicle sales despite aggressive competition in the market? A: Xiang Li, Chairman and CEO, stated that the new L Series has met sales expectations with healthy growth, achieving over 10,000 units in weekly sales. The company is confident that monthly deliveries will soon return to the 50,000 per month level, maintaining a strong market share in the RMB200,000 and above NEV market. Q: Will Li Auto consider expanding its product line to include sedans, and will it adopt dual powertrain strategies? A: Xiang Li explained that after achieving a revenue scale of RMB300 billion with the current SUV lineup, Li Auto will consider launching sedan and MPV models. These models will cater to a broader consumer base and will be offered in China, other Asian markets, and Europe. Q: Can you provide more details about the Halo OS and its advantages over traditional automotive operating systems? A: Yan Xie, CTO, highlighted that Halo OS offers significant advantages in resource usage and system architecture, enabling faster innovation. It allows for vertical integration of hardware, software, and algorithms, enhancing the AI user experience. The open-source nature of Halo OS also fosters industry collaboration and cost efficiency. Q: What are the key selling points of the upcoming Li i8 model? A: Xiang Li mentioned that the Li i8 will feature innovative styling, excellent handling, and ride comfort. It supports high-voltage charging technology, allowing for 500 kilometers of range in 10 minutes. The company is also expanding its supercharging network to support the launch. Q: What are Li Auto's plans for international expansion, and when can we expect significant export volumes? A: Xiang Li stated that Li Auto plans to focus on Asian and European markets, ensuring good hardware, after-sales support, and smart software services. The goal is to achieve 30% of overall sales from overseas markets in the long term, with a focus on recruiting top talent and establishing strong distributor networks. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
8 hours ago
- Automotive
- Yahoo
Li Auto Inc (LI) Q1 2025 Earnings Call Highlights: Navigating Growth Amidst Challenges
Total Revenue: RMB25.9 billion ($3.6 billion), up 1.1% year-over-year, down 41.4% quarter-over-quarter. Vehicle Sales Revenue: RMB24.7 billion ($3.4 billion), up 1.8% year-over-year, down 22.1% quarter-over-quarter. Gross Profit: RMB5.3 billion ($732.9 million), up 0.6% year-over-year, down 40.7% quarter-over-quarter. Gross Margin: 20.5%, compared to 20.6% in the same period last year and 20.3% in the prior quarter. Vehicle Margin: 90.8%, compared to 90.3% in the same period last year and 19.7% in the prior quarter. Operating Expenses: RMB5 billion ($695.5 million), down 14% year-over-year, down 4.2% quarter-over-quarter. R&D Expenses: RMB2.5 billion ($346.4 million), down 17.5% year-over-year, up 4.4% quarter-over-quarter. SG&A Expenses: RMB2.5 billion ($348.8 million), down 15% year-over-year, down 17.7% quarter-over-quarter. Income from Operations: RMB271.7 million ($37.4 million), compared to a loss of RMB584.9 million in the same period last year. Net Income: RMB646.6 million ($89.1 million), up 9.4% year-over-year, down 81.7% quarter-over-quarter. Diluted Net Earnings per ADS: RMB0.62 ($0.08), compared to RMB0.56 in the same period last year. Cash Position: RMB110.7 billion ($15.3 billion) as of March 1, 2025. Free Cash Flow: Negative RMB2.5 billion (negative $348.7 million), compared to negative RMB5.1 billion in the same period last year. Vehicle Deliveries: Over 92,000 vehicles in Q1 2025, a 15.5% increase year-over-year. Retail Stores: 500 stores in 151 cities as of April 30, 2025. Supercharging Stations: 2,350 stations with over 12,800 charging stalls. Warning! GuruFocus has detected 3 Warning Signs with BOM:514162. Release Date: May 29, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Li Auto Inc (NASDAQ:LI) delivered over 92,000 vehicles in Q1 2025, marking a 15.5% year-on-year increase. The company achieved a 14.1% market share in the RMB200,000 and above NEV market in China, reinforcing its leadership position. Li Auto Inc (NASDAQ:LI) launched the new Li MEGA and Li L Series, featuring advanced technologies like NVIDIA's Thor-U chip and AT LiDAR sensors. The company has built the largest urban highway supercharging network in China, with 2,350 supercharging stations and plans to expand to 4,000 by year-end. Li Auto Inc (NASDAQ:LI) maintains a strong cash position with RMB110.7 billion ($15.3 billion) as of March 2025. Total revenues in Q1 2025 were down 41.4% quarter-over-quarter, primarily due to seasonal factors like the Chinese New Year holiday. The company's net income decreased by 81.7% quarter-over-quarter, despite a year-over-year increase. Free cash flow was negative RMB2.5 billion in Q1 2025, compared to positive RMB6.1 billion in the prior quarter. Li Auto Inc (NASDAQ:LI) faces competitive pressure as competitors aggressively benchmark the L Series with competitive pricing and specifications. The company anticipates challenges in maintaining vehicle margins around 19% due to the transition to new models and production adjustments. Q: How does Li Auto plan to maintain its growth in vehicle sales despite aggressive competition in the market? A: Xiang Li, Chairman and CEO, stated that the new L Series has met sales expectations with healthy growth, achieving over 10,000 units in weekly sales. The company is confident that monthly deliveries will soon return to the 50,000 per month level, maintaining a strong market share in the RMB200,000 and above NEV market. Q: Will Li Auto consider expanding its product line to include sedans, and will it adopt dual powertrain strategies? A: Xiang Li explained that after achieving a revenue scale of RMB300 billion with the current SUV lineup, Li Auto will consider launching sedan and MPV models. These models will cater to a broader consumer base and will be offered in China, other Asian markets, and Europe. Q: Can you provide more details about the Halo OS and its advantages over traditional automotive operating systems? A: Yan Xie, CTO, highlighted that Halo OS offers significant advantages in resource usage and system architecture, enabling faster innovation. It allows for vertical integration of hardware, software, and algorithms, enhancing the AI user experience. The open-source nature of Halo OS also fosters industry collaboration and cost efficiency. Q: What are the key selling points of the upcoming Li i8 model? A: Xiang Li mentioned that the Li i8 will feature innovative styling, excellent handling, and ride comfort. It supports high-voltage charging technology, allowing for 500 kilometers of range in 10 minutes. The company is also expanding its supercharging network to support the launch. Q: What are Li Auto's plans for international expansion, and when can we expect significant export volumes? A: Xiang Li stated that Li Auto plans to focus on Asian and European markets, ensuring good hardware, after-sales support, and smart software services. The goal is to achieve 30% of overall sales from overseas markets in the long term, with a focus on recruiting top talent and establishing strong distributor networks. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
a day ago
- Business
- Yahoo
Calculating The Fair Value Of Li Auto Inc. (NASDAQ:LI)
Using the 2 Stage Free Cash Flow to Equity, Li Auto fair value estimate is US$27.90 Current share price of US$27.90 suggests Li Auto is potentially trading close to its fair value Analyst price target for LI is CN¥33.84, which is 21% above our fair value estimate Does the May share price for Li Auto Inc. (NASDAQ:LI) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by taking the expected future cash flows and discounting them to their present value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. Models like these may appear beyond the comprehension of a lay person, but they're fairly easy to follow. Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (CN¥, Millions) CN¥10.4b CN¥29.0b CN¥32.7b CN¥15.0b CN¥27.3b CN¥25.8b CN¥25.1b CN¥24.8b CN¥24.8b CN¥25.1b Growth Rate Estimate Source Analyst x7 Analyst x8 Analyst x8 Analyst x1 Analyst x1 Est @ -5.29% Est @ -2.82% Est @ -1.09% Est @ 0.12% Est @ 0.96% Present Value (CN¥, Millions) Discounted @ 13% CN¥9.2k CN¥22.7k CN¥22.7k CN¥9.2k CN¥14.8k CN¥12.4k CN¥10.7k CN¥9.4k CN¥8.3k CN¥7.4k ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = CN¥127b We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.9%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 13%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = CN¥25b× (1 + 2.9%) ÷ (13%– 2.9%) = CN¥258b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= CN¥258b÷ ( 1 + 13%)10= CN¥76b The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is CN¥203b. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of US$27.9, the company appears about fair value at a 0.002% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Li Auto as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 13%, which is based on a levered beta of 1.898. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Check out our latest analysis for Li Auto Strength Debt is not viewed as a risk. Weakness Earnings declined over the past year. Opportunity Annual earnings are forecast to grow faster than the American market. Current share price is below our estimate of fair value. Threat Revenue is forecast to grow slower than 20% per year. Although the valuation of a company is important, it is only one of many factors that you need to assess for a company. DCF models are not the be-all and end-all of investment valuation. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For Li Auto, there are three essential factors you should explore: Risks: For example, we've discovered 1 warning sign for Li Auto that you should be aware of before investing here. Future Earnings: How does LI's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NASDAQGS every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
a day ago
- Automotive
- Yahoo
Li Auto Inc. Announces Unaudited First Quarter 2025 Financial Results
Quarterly total revenues reached RMB25.9 billion (US$3.6 billion)1Quarterly deliveries reached 92,864 vehicles BEIJING, China, May 29, 2025 (GLOBE NEWSWIRE) -- Li Auto Inc. ('Li Auto' or the 'Company') (Nasdaq: LI; HKEX: 2015), a leader in China's new energy vehicle market, today announced its unaudited financial results for the quarter ended March 31, 2025. Operating Highlights for the First Quarter of 2025 Total deliveries for the first quarter of 2025 were 92,864 vehicles, representing a 15.5% year-over-year increase. 2025 Q1 2024 Q4 2024 Q3 2024 Q2 Deliveries 92,864 158,696 152,831 108,581 2024 Q1 2023 Q4 2023 Q3 2023 Q2 Deliveries 80,400 131,805 105,108 86,533 As of March 31, 2025, in China, the Company had 500 retail stores in 150 cities, 502 servicing centers and Li Auto-authorized body and paint shops operating in 225 cities, and 2,045 super charging stations in operation equipped with 11,038 charging stalls. Financial Highlights for the First Quarter of 2025 Vehicle sales were RMB24.7 billion (US$3.4 billion) in the first quarter of 2025, representing an increase of 1.8% from RMB24.3 billion in the first quarter of 2024 and a decrease of 42.1% from RMB42.6 billion in the fourth quarter of 2024. Vehicle margin2 was 19.8% in the first quarter of 2025, compared with 19.3% in the first quarter of 2024 and 19.7% in the fourth quarter of 2024. Total revenues were RMB25.9 billion (US$3.6 billion) in the first quarter of 2025, representing an increase of 1.1% from RMB25.6 billion in the first quarter of 2024 and a decrease of 41.4% from RMB44.3 billion in the fourth quarter of 2024. Gross profit was RMB5.3 billion (US$732.9 million) in the first quarter of 2025, representing an increase of 0.6% from RMB5.3 billion in the first quarter of 2024 and a decrease of 40.7% from RMB9.0 billion in the fourth quarter of 2024. Gross margin was 20.5% in the first quarter of 2025, compared with 20.6% in the first quarter of 2024 and 20.3% in the fourth quarter of 2024. Operating expenses were RMB5.0 billion (US$695.5 million) in the first quarter of 2025, representing a decrease of 14.0% from RMB5.9 billion in the first quarter of 2024 and a decrease of 4.2% from RMB5.3 billion in the fourth quarter of 2024. Income from operations was RMB271.7 million (US$37.4 million) in the first quarter of 2025, compared with RMB584.9 million loss from operations in the first quarter of 2024 and representing a decrease of 92.7% from RMB3.7 billion income from operations in the fourth quarter of 2024. Operating margin was 1.0% in the first quarter of 2025, compared with negative 2.3% in the first quarter of 2024 and 8.4% in the fourth quarter of 2024. Net income was RMB646.6 million (US$89.1 million) in the first quarter of 2025, representing an increase of 9.4% from RMB591.1 million in the first quarter of 2024 and a decrease of 81.7% from RMB3.5 billion in the fourth quarter of 2024. Non-GAAP net income3 was RMB1.0 billion (US$139.8 million) in the first quarter of 2025, representing a decrease of 20.5% from RMB1.3 billion in the first quarter of 2024 and a decrease of 74.9% from RMB4.0 billion in the fourth quarter of 2024. Diluted net earnings per ADS4 attributable to ordinary shareholders was RMB0.62 (US$0.08) in the first quarter of 2025, compared with RMB0.56 in the first quarter of 2024 and RMB3.31 in the fourth quarter of 2024. Non-GAAP diluted net earnings per ADS attributable to ordinary shareholders was RMB0.96 (US$0.13) in the first quarter of 2025, compared with RMB1.21 in the first quarter of 2024 and RMB3.79 in the fourth quarter of 2024. Net cash used in operating activities was RMB1.7 billion (US$234.4 million) in the first quarter of 2025, representing a decrease of 49.1% from RMB3.3 billion net cash used in operating activities in the first quarter of 2024 and compared with RMB8.7 billion net cash provided by operating activities in the fourth quarter of 2024. Free cash flow5 was negative RMB2.5 billion (US$348.7 million) in the first quarter of 2025, representing a decrease of 49.9% from negative RMB5.1 billion in the first quarter of 2024 and compared with RMB6.1 billion in the fourth quarter of 2024. Key Financial Results(in millions, except for percentages and per ADS data) For the Three Months Ended % Change6 March 31, 2024 December 31, 2024 March 31, 2025 YoY QoQ RMB RMB RMB Vehicle sales 24,251.6 42,643.0 24,678.6 1.8% (42.1)% Vehicle margin 19.3% 19.7% 19.8% 0.5pts 0.1pts Total revenues 25,633.7 44,273.7 25,926.8 1.1% (41.4)% Gross profit 5,284.3 8,970.2 5,318.5 0.6% (40.7)% Gross margin 20.6% 20.3% 20.5% (0.1)pts 0.2pts Operating expenses (5,869.2) (5,266.9) (5,046.8) (14.0)% (4.2)% (Loss)/Income from operations (584.9) 3,703.3 271.7 N/A (92.7)% Operating margin (2.3)% 8.4% 1.0% 3.3pts (7.4)pts Net income 591.1 3,532.7 646.6 9.4% (81.7)% Non-GAAP net income 1,276.4 4,039.7 1,014.3 (20.5)% (74.9)% Diluted net earnings per ADS attributable to ordinary shareholders 0.56 3.31 0.62 10.7% (81.3)% Non-GAAP diluted net earnings per ADS attributable to ordinary shareholders 1.21 3.79 0.96 (20.7)% (74.7)% Net cash (used in)/provided by operating activities (3,342.4) 8,680.3 (1,701.0) (49.1)% N/A Free cash flow (non-GAAP) (5,055.2) 6,059.3 (2,530.6) (49.9)% N/A Recent Developments Delivery Update In April 2025, the Company delivered 33,939 vehicles, representing an increase of 31.6% from April 2024. As of April 30, 2025, in China, the Company had 500 retail stores in 151 cities, 500 servicing centers and Li Auto-authorized body and paint shops operating in 223 cities, and 2,267 super charging stations in operation equipped with 12,340 charging stalls. Refreshed Product Lineup In April and May 2025, the Company successively launched Li MEGA Home, the new Li MEGA Ultra, and the new Li L Series. Li MEGA Home offers zero-gravity second-row seats that rotate 45°, 90°, and 180°, transforming the vehicle into a versatile and user-friendly space ideal for dining, entertainment, work, and other activities. It also features electrically powered front doors with a quiet-close mechanism, ensuring both seamless accessibility and refined acoustic comfort for passengers. In terms of assisted driving systems, the refresh upgrades all Li AD Max models with a more powerful NVIDIA Thor-U chip and all Li AD Pro models with Horizon Robotics Journey 6M and LiDAR sensors, enhancing both intelligence and safety. Li MEGA Home is priced at RMB559,800, while prices for other refreshed models remain unchanged. Deliveries for all these models began in May. Open-Source Automotive Operating System In April 2025, the Company became the first automaker worldwide to open-source its proprietary smart vehicle operating system, Li Halo OS. This initiative invites industry players and global developers to collaborate on optimizing system performance and advancing ecosystem innovation. 2024 Environmental, Social and Governance Report On April 10, 2025, the Company published its 2024 Environmental, Social and Governance (ESG) report ( highlighting the progress it has made toward achieving its sustainability objectives and reflecting its firm commitment to fostering a more sustainable future. CEO and CFO Comments Mr. Xiang Li, chairman and chief executive officer of Li Auto, commented, 'In the first quarter, we maintained our sales leadership position among Chinese automotive brands in the RMB200,000 and above NEV market by consistently delivering products and services with exceptional value for our users. Following the recent refresh of our product lineup, we have seen a robust influx of orders for the new Li L series, demonstrating their compelling product strength. With top-notch configurations, Li MEGA Home is the product that aligns most closely with our mission to 'Create a Mobile Home, Create Happiness.' Having garnered widespread market acclaim since its launch, it further reinforced our confidence in our ability to secure a top-tier position within China's premium BEV market. We also look forward to the July launch of our first battery electric SUV, Li i8, which will further demonstrate our commitment to delivering unparalleled user value. Additionally, our assisted driving solution is evolving rapidly. Our in-house developed VLA Driver as our next-generation ADAS architecture is a Vision-Language-Action large model that integrates spatial, linguistic, and behavioral intelligence to enable seamless vehicle-user interactions. Looking ahead, we will continue to pioneer intelligent technological advancements to refine the user experience.' Mr. Tie Li, chief financial officer of Li Auto, added, 'We delivered solid results in the first quarter, achieving a 15.5% year-over-year increase in vehicle deliveries and total revenues of RMB25.9 billion during what is typically a seasonally slow period for auto sales. Despite product iterations, our gross margin remained healthy at 20.5%, and net income reached RMB646.6 million, up 9.4% year-over-year, thanks to our disciplined cost management and growing economies of scale. Our first-quarter results demonstrate our ability to navigate dynamic market conditions effectively while maintaining strong profitability. Building upon this solid financial foundation, we will continue to drive business growth and create additional user value through relentless innovation while enhancing operating efficiency. Supported by our proven execution capabilities, we are confident that these strategic initiatives will position us for long-term success.' Financial Results for the First Quarter of 2025 Revenues Total revenues were RMB25.9 billion (US$3.6 billion) in the first quarter of 2025, representing an increase of 1.1% from RMB25.6 billion in the first quarter of 2024 and a decrease of 41.4% from RMB44.3 billion in the fourth quarter of 2024. Vehicle sales were RMB24.7 billion (US$3.4 billion) in the first quarter of 2025, representing an increase of 1.8% from RMB24.3 billion in the first quarter of 2024 and a decrease of 42.1% from RMB42.6 billion in the fourth quarter of 2024. The increase in revenue from vehicle sales over the first quarter of 2024 was primarily attributable to the increase in vehicle deliveries, partially offset by the lower average selling price mainly due to different product mix. The decrease in revenue from vehicle sales over the fourth quarter of 2024 was primarily attributable to the decrease in vehicle deliveries affected by seasonal factors related to the Chinese New Year holiday. Other sales and services were RMB1.2 billion (US$172.0 million) in the first quarter of 2025, representing a decrease of 9.7% from RMB1.4 billion in the first quarter of 2024 and a decrease of 23.5% from RMB1.6 billion in the fourth quarter of 2024. The revenue from other sales and services remained relatively stable over the first quarter of 2024. The decrease in revenue from other sales and services over the fourth quarter of 2024 was mainly due to decreased embedded products and services offered together with vehicle sales, which is in line with lower quarter-over-quarter vehicle deliveries. Cost of Sales and Gross Margin Cost of sales was RMB20.6 billion (US$2.8 billion) in the first quarter of 2025, representing an increase of 1.3% from RMB20.3 billion in the first quarter of 2024 and a decrease of 41.6% from RMB35.3 billion in the fourth quarter of 2024. The increase in cost of sales over the first quarter of 2024 was primarily attributable to the increase in vehicle deliveries, partially offset by the lower average cost of sales mainly due to different product mix and cost reduction. The decrease in cost of sales over the fourth quarter of 2024 was primarily attributable to the decrease in vehicle deliveries. Gross profit was RMB5.3 billion (US$732.9 million) in the first quarter of 2025, representing an increase of 0.6% from RMB5.3 billion in the first quarter of 2024 and a decrease of 40.7% from RMB9.0 billion in the fourth quarter of 2024. Vehicle margin was 19.8% in the first quarter of 2025, compared with 19.3% in the first quarter of 2024 and 19.7% in the fourth quarter of 2024. The increase in vehicle margin over the first quarter of 2024 was mainly due to cost reduction and pricing strategy changes in the first quarter of 2024 partially offset by different product mix. The vehicle margin remained relatively stable over the fourth quarter of 2024. Gross margin was 20.5% in the first quarter of 2025, compared with 20.6% in the first quarter of 2024 and 20.3% in the fourth quarter of 2024. The gross margin remained relatively stable over the first quarter of 2024 and the fourth quarter of 2024. Operating Expenses Operating expenses were RMB5.0 billion (US$695.5 million) in the first quarter of 2025, representing a decrease of 14.0% from RMB5.9 billion in the first quarter of 2024 and a decrease of 4.2% from RMB5.3 billion in the fourth quarter of 2024. Research and development expenses were RMB2.5 billion (US$346.4 million) in the first quarter of 2025, representing a decrease of 17.5% from RMB3.0 billion in the first quarter of 2024 and an increase of 4.4% from RMB2.4 billion in the fourth quarter of 2024. The decrease in research and development expenses over the first quarter of 2024 was mainly attributable to decreased employee compensation and the impact of the pace of new vehicle programs. The research and development expenses remained relatively stable over the fourth quarter of 2024. Selling, general and administrative expenses were RMB2.5 billion (US$348.8 million) in the first quarter of 2025, representing a decrease of 15.0% from RMB3.0 billion in the first quarter of 2024 and a decrease of 17.7% from RMB3.1 billion in the fourth quarter of 2024. The decrease in selling, general and administrative expenses over the first quarter of 2024 and the fourth quarter of 2024 was primarily due to decreased employee compensation, improved operational efficiency and decreased marketing and promotional activities. Income/(Loss) from Operations Income from operations was RMB271.7 million (US$37.4 million) in the first quarter of 2025, compared with RMB584.9 million loss from operations in the first quarter of 2024 and representing a decrease of 92.7% from RMB3.7 billion income from operations in the fourth quarter of 2024. Operating margin was 1.0% in the first quarter of 2025, compared with negative 2.3% in the first quarter of 2024 and 8.4% in the fourth quarter of 2024. Non-GAAP income from operations was RMB639.3 million (US$88.1 million) in the first quarter of 2025, representing an increase of 537.2% from RMB100.3 million in the first quarter of 2024 and a decrease of 84.8% from RMB4.2 billion in the fourth quarter of 2024. Net Income and Net Earnings Per Share Net income was RMB646.6 million (US$89.1 million) in the first quarter of 2025, representing an increase of 9.4% from RMB591.1 million in the first quarter of 2024 and a decrease of 81.7% from RMB3.5 billion in the fourth quarter of 2024. Non-GAAP net income was RMB1.0 billion (US$139.8 million) in the first quarter of 2025, representing a decrease of 20.5% from RMB1.3 billion in the first quarter of 2024 and a decrease of 74.9% from RMB4.0 billion in the fourth quarter of 2024. Basic and diluted net earnings per ADS attributable to ordinary shareholders were RMB0.65 (US$0.09) and RMB0.62 (US$0.08) in the first quarter of 2025, respectively, compared with RMB0.60 and RMB0.56 in the first quarter of 2024, respectively, and RMB3.52 and RMB3.31 in the fourth quarter of 2024, respectively. Non-GAAP basic and diluted net earnings per ADS attributable to ordinary shareholders were RMB1.01 (US$0.14) and RMB0.96 (US$0.13) in the first quarter of 2025, respectively, compared with RMB1.29 and RMB1.21 in the first quarter of 2024, respectively, and RMB4.03 and RMB3.79 in the fourth quarter of 2024, respectively. Cash Position, Operating Cash Flow and Free Cash Flow Cash position7 was RMB110.7 billion (US$15.3 billion) as of March 31, 2025. Net cash used in operating activities was RMB1.7 billion (US$234.4 million) in the first quarter of 2025, representing a decrease of 49.1% from RMB3.3 billion net cash used in operating activities in the first quarter of 2024 and compared with RMB8.7 billion net cash provided by operating activities in the fourth quarter of 2024. The change in net cash used in operating activities over the first quarter of 2024 was mainly due to the increase in cash received from customers and other changes in working capital. The change in net cash used in operating activities over the fourth quarter of 2024 was mainly due to the decrease in cash received from customers. Free cash flow was negative RMB2.5 billion (US$348.7 million) in the first quarter of 2025, representing a decrease of 49.9% from negative RMB5.1 billion in the first quarter of 2024 and compared with RMB6.1 billion in the fourth quarter of 2024. Business Outlook For the second quarter of 2025, the Company expects: Deliveries of vehicles to be between 123,000 and 128,000 vehicles, representing a year-over-year increase of 13.3% to 17.9%. Total revenues to be between RMB32.5 billion (US$4.5 billion) and RMB33.8 billion (US$4.7 billion), representing a year-over-year increase of 2.5% to 6.7%. This business outlook reflects the Company's current and preliminary views on its business situation and market conditions, which are subject to change. Conference Call Management will hold a conference call at 8:00 a.m. U.S. Eastern Time on Thursday, May 29, 2025 (8:00 p.m. Beijing/Hong Kong Time on May 29, 2025) to discuss financial results and answer questions from investors and analysts. For participants who wish to join the call, please complete online registration using the link provided below prior to the scheduled call start time. Upon registration, participants will receive the conference call access information, including dial-in numbers, passcode, and a unique access PIN. To join the conference, please dial the number provided, enter the passcode followed by your PIN, and you will join the conference instantly. Participant Online Registration: A replay of the conference call will be accessible through June 5, 2025, by dialing the following numbers: United States: +1-855-883-1031 Mainland China: +86-400-1209-216 Hong Kong, China: +852-800-930-639 International: +61-7-3107-6325 Replay PIN: 10046860 Additionally, a live and archived webcast of the conference call will be available on the Company's investor relations website at Non-GAAP Financial Measures The Company uses non-GAAP financial measures, such as non-GAAP cost of sales, non-GAAP research and development expenses, non-GAAP selling, general and administrative expenses, non-GAAP income from operations, non-GAAP net income, non-GAAP net income attributable to ordinary shareholders, non-GAAP basic and diluted net earnings per ADS attributable to ordinary shareholders, non-GAAP basic and diluted net earnings per share attributable to ordinary shareholders and free cash flow, in evaluating its operating results and for financial and operational decision-making purposes. By excluding the impact of share-based compensation expenses and release of valuation allowance on deferred tax assets, the Company believes that the non-GAAP financial measures help identify underlying trends in its business and enhance the overall understanding of the Company's past performance and future prospects. The Company also believes that the non-GAAP financial measures allow for greater visibility with respect to key metrics used by the Company's management in its financial and operational decision-making. The non-GAAP financial measures are not presented in accordance with U.S. GAAP and may be different from non-GAAP methods of accounting and reporting used by other companies. The non-GAAP financial measures have limitations as analytical tools and when assessing the Company's operating performance, investors should not consider them in isolation, or as a substitute for financial information prepared in accordance with U.S. GAAP. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure. The Company mitigates these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measures, all of which should be considered when evaluating the Company's performance. For more information on the non-GAAP financial measures, please see the table captioned 'Unaudited Reconciliation of U.S. GAAP and Non-GAAP Results' set forth at the end of this press release. Exchange Rate Information This press release contains translations of certain Renminbi amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi are made at a rate of RMB7.2567 to US$1.00, the exchange rate on March 31, 2025, set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the Renminbi or U.S. dollars amounts referred could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all. About Li Auto Inc. Li Auto Inc. is a leader in China's new energy vehicle market. The Company designs, develops, manufactures, and sells premium smart electric vehicles. Its mission is: Create a Mobile Home, Create Happiness (创造移动的家, 创造幸福的家). Through innovations in product, technology, and business model, the Company provides families with safe, convenient, and comfortable products and services. Li Auto is a pioneer in successfully commercializing extended-range electric vehicles in China. While firmly advancing along this technological route, it builds platforms for battery electric vehicles in parallel. The Company leverages technology to create value for users. It concentrates its in-house development efforts on proprietary range extension systems, innovative electric vehicle technologies, and smart vehicle solutions. The Company started volume production in November 2019. Its current model lineup includes Li MEGA, a high-tech flagship family MPV, Li L9, a six-seat flagship family SUV, Li L8, a six-seat premium family SUV, Li L7, a five-seat flagship family SUV, and Li L6, a five-seat premium family SUV. The Company will continue to expand its product lineup to target a broader user base. For more information, please visit: Safe Harbor Statement This press release contains statements that may constitute 'forward-looking' statements pursuant to the 'safe harbor' provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as 'will,' 'expects,' 'anticipates,' 'aims,' 'future,' 'intends,' 'plans,' 'believes,' 'estimates,' 'targets,' 'likely to,' 'challenges,' and similar statements. Li Auto may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the 'SEC') and The Stock Exchange of Hong Kong Limited (the 'HKEX'), in its annual report to shareholders, in press releases and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Statements that are not historical facts, including statements about Li Auto's beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Li Auto's strategies, future business development, and financial condition and results of operations; Li Auto's limited operating history; risks associated with extended-range electric vehicles and high-power charging battery electric vehicles; Li Auto's ability to develop, manufacture, and deliver vehicles of high quality and appeal to customers; Li Auto's ability to generate positive cash flow and profits; product defects or any other failure of vehicles to perform as expected; Li Auto's ability to compete successfully; Li Auto's ability to build its brand and withstand negative publicity; cancellation of orders for Li Auto's vehicles; Li Auto's ability to develop new vehicles; and changes in consumer demand and government incentives, subsidies, or other favorable government policies. Further information regarding these and other risks is included in Li Auto's filings with the SEC and the HKEX. All information provided in this press release is as of the date of this press release, and Li Auto does not undertake any obligation to update any forward-looking statement, except as required under applicable law. For investor and media inquiries, please contact: Li Auto RelationsEmail: ir@ Christensen AdvisoryRoger HuTel: +86-10-5900-1548Email: Li@ Li Auto Condensed Consolidated Statements of Comprehensive Income(All amounts in thousands, except for ADS/ordinary share and per ADS/ordinary share data) For the Three Months Ended March 31,2024 December 31,2024 March 31,2025 March 31,2025 RMB RMB RMB US$ Revenues: Vehicle sales 24,251,553 42,642,978 24,678,585 3,400,800 Other sales and services 1,382,107 1,630,694 1,248,229 172,011 Total revenues 25,633,660 44,273,672 25,926,814 3,572,811 Cost of sales: Vehicle sales (19,561,658) (34,252,151) (19,801,927) (2,728,779) Other sales and services (787,697) (1,051,303) (806,428) (111,129) Total cost of sales (20,349,355) (35,303,454) (20,608,355) (2,839,908) Gross profit 5,284,305 8,970,218 5,318,459 732,903 Operating expenses: Research and development (3,048,886) (2,408,357) (2,513,854) (346,418) Selling, general and administrative (2,977,585) (3,076,993) (2,531,009) (348,782) Other operating income/(expense), net 157,264 218,446 (1,942) (268) Total operating expenses (5,869,207) (5,266,904) (5,046,805) (695,468) (Loss)/Income from operations (584,902) 3,703,314 271,654 37,435 Other (expense)/income: Interest expense (28,598) (61,759) (48,220) (6,645) Interest income and investment income, net 1,068,888 403,021 516,261 71,143 Others, net 220,184 17,128 34,730 4,786 Income before income tax 675,572 4,061,704 774,425 106,719 Income tax expense (84,446) (529,010) (127,780) (17,609) Net income 591,126 3,532,694 646,645 89,110 Less: Net (loss)/income attributable to noncontrolling interests (1,432) 9,757 (3,679) (507) Net income attributable to ordinary shareholders of Li Auto Inc. 592,558 3,522,937 650,324 89,617 Net income 591,126 3,532,694 646,645 89,110 Other comprehensive (loss)/income Foreign currency translation adjustment, net of tax (59,936) 236,903 (69,994) (9,645) Total other comprehensive (loss)/income (59,936) 236,903 (69,994) (9,645) Total comprehensive income 531,190 3,769,597 576,651 79,465 Less: Net (loss)/income attributable to noncontrolling interests (1,432) 9,757 (3,679) (507) Comprehensive income attributable to ordinary shareholders of Li Auto Inc. 532,622 3,759,840 580,330 79,972 Weighted average number of ADSs Basic 993,308,654 1,000,250,311 1,004,099,494 1,004,099,494 Diluted 1,066,436,872 1,066,897,163 1,069,104,610 1,069,104,610 Net earnings per ADS attributable to ordinary shareholders Basic 0.60 3.52 0.65 0.09 Diluted 0.56 3.31 0.62 0.08 Weighted average number of ordinary shares Basic 1,986,617,307 2,000,500,621 2,008,198,987 2,008,198,987 Diluted 2,132,873,744 2,133,794,325 2,138,209,219 2,138,209,219 Net earnings per share attributable to ordinary shareholders Basic 0.30 1.76 0.32 0.04 Diluted 0.28 1.65 0.31 0.04Li Auto Condensed Consolidated Balance Sheets(All amounts in thousands) As of December 31,2024 March 31,2025 March 31,2025 RMB RMB US$ ASSETS Current assets: Cash and cash equivalents 65,901,123 53,233,352 7,335,752 Restricted cash 6,849 4,987 687 Time deposits and short-term investments 46,904,548 57,445,104 7,916,147 Trade receivable 135,112 68,538 9,445 Inventories 8,185,604 10,092,980 1,390,850 Prepayments and other current assets 5,176,546 5,329,656 734,446 Total current assets 126,309,782 126,174,617 17,387,327 Non-current assets: Long-term investments 922,897 821,563 113,214 Property, plant and equipment, net 21,140,933 20,640,105 2,844,283 Operating lease right-of-use assets, net 8,323,963 8,378,789 1,154,628 Intangible assets, net 914,951 928,846 127,998 Goodwill 5,484 5,484 756 Deferred tax assets 2,542,180 2,740,944 377,712 Other non-current assets 2,188,888 2,164,357 298,256 Total non-current assets 36,039,296 35,680,088 4,916,847 Total assets 162,349,078 161,854,705 22,304,174 LIABILITIES AND EQUITY Current liabilities: Short-term borrowings 281,102 231,102 31,847 Trade and notes payable 53,596,194 51,958,831 7,160,118 Amounts due to related parties 11,492 11,003 1,516 Deferred revenue, current 1,396,489 1,322,036 182,181 Operating lease liabilities, current 1,438,092 1,438,517 198,233 Finance lease liabilities, current 95,205 124,881 17,209 Accruals and other current liabilities 12,397,322 12,390,444 1,707,449 Total current liabilities 69,215,896 67,476,814 9,298,553 Non-current liabilities: Long-term borrowings 8,151,598 8,145,201 1,122,439 Deferred revenue, non-current 720,531 683,475 94,185 Operating lease liabilities, non-current 5,735,738 5,793,176 798,321 Finance lease liabilities, non-current 642,984 622,995 85,851 Deferred tax liabilities 864,999 854,972 117,818 Other non-current liabilities 5,696,950 5,951,991 820,206 Total non-current liabilities 21,812,800 22,051,810 3,038,820 Total liabilities 91,028,696 89,528,624 12,337,373 Total Li Auto Inc. shareholders' equity 70,874,884 71,824,262 9,897,648 Noncontrolling interests 445,498 501,819 69,153 Total shareholders' equity 71,320,382 72,326,081 9,966,801 Total liabilities and shareholders' equity 162,349,078 161,854,705 22,304,174 Li Auto Condensed Consolidated Statements of Cash Flows(All amounts in thousands) For the Three Months Ended March 31,2024 December 31,2024 March 31,2025 March 31,2025 RMB RMB RMB US$ Net cash (used in)/provided by operating activities (3,342,386) 8,680,301 (1,700,968) (234,400) Net cash used in investing activities (3,098,206) (19,987,058) (10,959,789) (1,510,299) Net cash provided by/(used in) financing activities 185,257 (734,467) 61,406 8,462 Effect of exchange rate changes on cash, cash equivalents and restricted cash 55,813 355,742 (70,282) (9,685) Net change in cash, cash equivalents and restricted cash (6,199,522) (11,685,482) (12,669,633) (1,745,922) Cash, cash equivalents and restricted cash at beginning of period 91,329,509 77,593,454 65,907,972 9,082,361 Cash, cash equivalents and restricted cash at end of period 85,129,987 65,907,972 53,238,339 7,336,439 Net cash (used in)/provided by operating activities (3,342,386) 8,680,301 (1,700,968) (234,400) Capital expenditures (1,712,843) (2,620,969) (829,597) (114,322) Free cash flow (non-GAAP) (5,055,229) 6,059,332 (2,530,565) (348,722)Li Auto Reconciliation of U.S. GAAP and Non-GAAP Results(All amounts in thousands, except for ADS/ordinary share and per ADS/ordinary share data) For the Three Months Ended March 31,2024 December 31,2024 March 31,2025 March 31,2025 RMB RMB RMB US$ Cost of sales (20,349,355) (35,303,454) (20,608,355) (2,839,908) Share-based compensation expenses 13,469 10,394 7,196 992 Non-GAAP cost of sales (20,335,886) (35,293,060) (20,601,159) (2,838,916) Research and development expenses (3,048,886) (2,408,357) (2,513,854) (346,418) Share-based compensation expenses 433,764 303,047 238,932 32,926 Non-GAAP research and development expenses (2,615,122) (2,105,310) (2,274,922) (313,492) Selling, general and administrative expenses (2,977,585) (3,076,993) (2,531,009) (348,782) Share-based compensation expenses 237,994 199,633 121,511 16,745 Non-GAAP selling, general and administrative expenses (2,739,591) (2,877,360) (2,409,498) (332,037) (Loss)/Income from operations (584,902) 3,703,314 271,654 37,435 Share-based compensation expenses 685,227 513,074 367,639 50,663 Non-GAAP income from operations 100,325 4,216,388 639,293 88,098 Net income 591,126 3,532,694 646,645 89,110 Share-based compensation expenses 685,227 513,074 367,639 50,663 Release of valuation allowance on deferred tax assets — (6,085) — — Non-GAAP net income8 1,276,353 4,039,683 1,014,284 139,773 Net income attributable to ordinary shareholders of Li Auto Inc. 592,558 3,522,937 650,324 89,617 Share-based compensation expenses 685,227 513,074 367,639 50,663 Release of valuation allowance on deferred tax assets — (6,085) — — Non-GAAP net income attributable to ordinary shareholders of Li Auto Inc. 1,277,785 4,029,926 1,017,963 140,280 Weighted average number of ADSs Basic 993,308,654 1,000,250,311 1,004,099,494 1,004,099,494 Diluted 1,066,436,872 1,066,897,163 1,069,104,610 1,069,104,610 Non-GAAP net earnings per ADS attributable to ordinary shareholders Basic 1.29 4.03 1.01 0.14 Diluted 1.21 3.79 0.96 0.13 Weighted average number of ordinary shares Basic 1,986,617,307 2,000,500,621 2,008,198,987 2,008,198,987 Diluted 2,132,873,744 2,133,794,325 2,138,209,219 2,138,209,219 Non-GAAP net earnings per share attributable to ordinary shareholders9 Basic 0.64 2.01 0.51 0.07 Diluted 0.60 1.89 0.48 0.07 ____________________ 1 All translations from Renminbi ('RMB') to U.S. dollars ('US$') are made at a rate of RMB7.2567 to US$1.00, the exchange rate on March 31, 2025 as set forth in the H.10 statistical release of the Federal Reserve Board. 2 Vehicle margin is the margin of vehicle sales, which is calculated based on revenues and cost of sales derived from vehicle sales only. 3 The Company's non-GAAP financial measures exclude share-based compensation expenses and release of valuation allowance on deferred tax assets. See 'Unaudited Reconciliation of U.S. GAAP and Non-GAAP Results' set forth at the end of this press release. 4 Each ADS represents two Class A ordinary shares. 5 Free cash flow represents operating cash flow less capital expenditures, which is considered a non-GAAP financial measure. 6 Except for vehicle margin, gross margin, and operating margin, where absolute changes instead of percentage changes are presented. 7 Cash position includes cash and cash equivalents, restricted cash, time deposits and short-term investments, and long-term time deposits and financial instruments included in long-term investments. 8 Non-GAAP items have no tax impact for all the periods presented. 9 Non-GAAP basic net earnings per share attributable to ordinary shareholders is calculated by dividing non-GAAP net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the periods. Non-GAAP diluted net earnings per share attributable to ordinary shareholders is calculated by dividing non-GAAP net income attributable to ordinary shareholders by the weighted average number of ordinary shares and dilutive potential ordinary shares outstanding during the periods, including the dilutive effects of convertible senior notes as determined under the if-converted method and the dilutive effect of share-based awards as determined under the treasury stock in to access your portfolio
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15-05-2025
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Is It Worth Investing in Li Auto (LI) Based on Wall Street's Bullish Views?
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter? Let's take a look at what these Wall Street heavyweights have to say about Li Auto Inc. Sponsored ADR (LI) before we discuss the reliability of brokerage recommendations and how to use them to your advantage. Li Auto currently has an average brokerage recommendation (ABR) of 1.89, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 14 brokerage firms. An ABR of 1.89 approximates between Strong Buy and Buy. Of the 14 recommendations that derive the current ABR, eight are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 57.1% and 7.1% of all recommendations. Check price target & stock forecast for Li Auto here>>>While the ABR calls for buying Li Auto, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential. Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation. In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement. Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision. In spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures. The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5. Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide. In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research. Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns. Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements. Looking at the earnings estimate revisions for Li Auto, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at $1.38. Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Li Auto. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for Li Auto. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Li Auto Inc. Sponsored ADR (LI) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
