--- title: "Leapmotor: Profit Guidance Slashed; Is Overseas Expansion the Only Way Out?" type: "Topics" locale: "en" url: "https://longbridge.com/en/dolphin/post/43582645.md" description: "2026 net profit guidance cut from RMB 5 bn to RMB 3 bn." datetime: "2026-08-25T08:52:17.000Z" locales: - [en](https://longbridge.com/en/dolphin/post/43582645.md) - [zh-CN](https://longbridge.com/zh-CN/dolphin/post/43582645.md) - [zh-HK](https://longbridge.com/zh-HK/dolphin/post/43582645.md) author: "[Dolphin Research](https://longbridge.com/en/dolphin.md)" generator: "portal-rs" --- # Leapmotor: Profit Guidance Slashed; Is Overseas Expansion the Only Way Out? $LEAPMOTOR(09863.HK) released its Q2 2026 results after the HK close on Aug 25 (Beijing time). Overall, the print was decent, with both revenue and profit beating estimates. However, given rising raw material costs and mix shifts, management cut full-year net profit guidance from RMB 5bn to ~RMB 3bn. **1\. Top line beat, ASP still trending higher QoQ:** In Q2, Leapmotor reported revenue of RMB 27.3bn (+92% YoY), ahead of the street at RMB 25.9bn, mainly on stronger-than-expected ASP gains QoQ. Quarterly ASP rose to RMB 111k per vehicle vs. RMB 98k in Q1, up RMB 13k. While the low-priced A10 (list price ~RMB 60k–90k) sold strongly, lifting the A-series mix by ~22ppt QoQ to 26.1%, the following factors offset the ASP drag: a. **High-priced D-series pulled the mix upward:** Driven by the hit D19 (large SUV, priced RMB 219.8k–269.8k), the D-series mix rose ~7.8ppt QoQ to 7.9%. b. **Accelerating exports boosted carbon-credit income:** Q2 export sales reached ~55k units, up ~35% QoQ, and faster overseas shipments lifted carbon-credit revenue further QoQ. **2\. GPM improved QoQ, in line with market expectations:** Q2 GPM came in at 12.6%, up 3.2ppt QoQ. Per-vehicle GP increased by ~RMB 5k to ~RMB 14k, mainly due to: a. **Scale effects kicking in:** Q2 deliveries were 246k units, +124% QoQ off a weak Q1 base and +84% YoY, driven by the breakout success of A10 and D19, which helped unlock scale. b. **Higher-margin carbon-credit income climbed:** With exports accelerating, carbon-credit revenue, which is essentially pure GP, also increased QoQ. c. **Higher-margin D19/D99 contribution rose:** Their mix moved up QoQ, lifting overall margins. d. **Upstream raw-material costs still rising:** Prices for aluminum, steel, memory/storage and batteries continued to trend up in Q2, but were partly offset by the above drivers, resulting in QoQ GPM expansion. **3\. Opex grew QoQ, but operating leverage improved:** Opex continued to rise QoQ in Q2, with the following highlights: a. **R&D at RMB 1.28bn, +RMB 240mn QoQ**, focused on architecture centralization — Leap 4.0 central domain control debuted on D19, leveraging dual 8797 chips and large memory to enable a cockpit-driving unified coordination, breaking the traditional barrier between infotainment and ADAS, with one brain orchestrating vehicle intelligence. Smart driving — City NGP has been opened across the A/B/C/D lineup, and in Sep 2026 the company will release a new platform and ADAS package, aiming for a step-change in the driving-intelligence experience. b. **Selling expenses at RMB 1.31bn, +RMB 630mn QoQ**, above the street at RMB 1.1bn: The sharp increase was due to heavier promo spend for dense new-model launches and faster channel buildout. Domestic stores net-added 71 to 1,064, and overseas outlets reached 1,010, ~90% in Europe. Despite total opex rising ~RMB 1.0bn QoQ, opex ratio fell by 8.4ppt QoQ to 11.6% thanks to operating leverage from volume. **4\. Net profit turned positive:** Q2 attributable net profit was ~RMB 600mn (vs. -RMB 390mn in Q1), implying a 2.2% NPM. The swing was driven by the top-line beat and operating leverage. **Dolphin Research view** Overall, Leapmotor delivered a decent quarter. Revenue beat as product mix continued to move up (D-series) and carbon-credit income rose QoQ with faster exports. GPM recovered from the Q1 trough (9.4% to 12.6%), up 3.2ppt QoQ, supported by high-priced, higher-margin D-series sales, scale effects, and carbon-credit revenue, in line with the prior 12%–13% guide. **However, on raw-material inflation, Leapmotor cut full-year margin and profit guidance:** a. Full-year GPM guidance was lowered from 14%–15% to 13%–14%, with vehicle-level GPM to 10%–11%. b. Based on the lower margin guide, full-year 2026 net profit guidance was cut from RMB 5bn to RMB 3bn. c. Export volume guidance was raised: Jan–Jul 2026 exports reached 114k units (annualized ~195k), so the 2026 export target was lifted from 150k to 200k units. For 2027, the target was raised to 350k–400k units, implying another doubling. **Near term**, with net profit guidance cut from RMB 5bn to ~RMB 3bn, the market needs to digest lower earnings, and the stock is likely under pressure. The downgrade stems from rising battery and memory-chip costs and mix headwinds as exports, currently at lower ASPs, take a larger share. Given the current pace (1H26 deliveries 356.5k units, +60.8% YoY) versus the 1.05–1.10mn prior target, we conservatively expect 2026 deliveries of 950k–1.0mn (+59%–68% YoY; domestic 750k–800k, overseas 200k). 1H26 exports reached 96.3k (+373% YoY), making the 200k full-year overseas target highly achievable. Dolphin Research estimates 2026 revenue at RMB 101.4–106.5bn (+57%–65% YoY). At the current ~RMB 49.2bn market cap, 2026 P/S is only 0.46–0.50x, near the bottom of the historical range. **Upside catalysts should not be ignored**: D19’s premium positioning is gaining traction (May sales >7k, D-series target GPM 20%+). **In Sep, the company will unveil a new platform** (next-gen AD architecture, battery and e-drive upgrades), which could support a higher ‘smart’ valuation. Q4 is peak season, and with D99 ramping (launched in Jun; entry price cut by RMB 40k vs. presale), volumes could surprise on the upside. Under a neutral case, if P/S re-rates to 0.6x, fair market cap would be RMB 60.8–63.9bn (PE 20–21x), implying 24%–30% upside vs. current (HKD 50–52). **Mid to long term**, Leapmotor’s strong cost-down capability (full-stack in-house R&D, platformized procurement) and export scale-up (1H26 exports already above full-year 2025, with targets repeatedly raised) underpin stable vehicle GP. Once memory/storage and commodity prices ease, coupled with cost savings from self-developed battery cells, GPM could trend back to 14%–15% over time. Moreover, localization with Stellantis in Spain is progressing well (Madrid plant sale likely, ~50k localized units in 2027 expected). Tech licensing and component supply (FAW Hongqi G117 to start mass production in Q4; collaboration on STLA platforms) provide upside optionality to valuation. Related charts: Dolphin Research historical coverage on Leapmotor: Mar 16, 2026 Trans: [Leapmotor (4Q25 Trans): 2026 still targets 1.0mn units](https://longbridge.com/en/topics/39285959?invite-code=4NOXYT&app_id=longbridge&utm_source=longbridge_app_share) Mar 16, 2026 earnings take: [Leapmotor: Export juggernaut — can it truly ‘lead’ the new forces to 1mn?](https://longbridge.com/en/topics/39284893?invite-code=4NOXYT&app_id=longbridge&utm_source=longbridge_app_share) Nov 19, 2025 Trans: [Leapmotor (3Q25 Trans): 2026 sales target 1.0mn units, net profit target RMB 5bn](https://longbridge.com/en/topics/36461389?invite-code=4NOXYT&app_id=longbridge&utm_source=longbridge_app_share) Nov 18, 2025 earnings take: [Leapmotor: momentum stalled — how to break through the red-ocean battlefield?](https://longbridge.com/en/topics/36460934?invite-code=4NOXYT&app_id=longbridge&utm_source=longbridge_app_share) Aug 19, 2025 Trans: [Leapmotor: full-year sales target raised to 580k–650k units](https://longbridge.com/en/topics/33092524?invite-code=4NOXYT&app_id=longbridge&utm_source=longbridge_app_share) Aug 18, 2025 earnings take: [Competing hard in a red ocean — Leapmotor’s breakthrough](https://longbridge.com/en/topics/33084680?invite-code=4NOXYT&app_id=longbridge&utm_source=longbridge_app_share) Sep 29, 2022 deep dive: [Leapmotor: after a 30% plunge post-IPO, is the ‘Redmi version of XPeng’ a trap or an opportunity?](https://longportapp.cn/en/topics/3482580?app_id=longbridge&invite-code=4NOXYT&utm_source=longbridge_app_share) \ **Risk disclosure and disclaimer:** [**Dolphin Research disclaimer and general disclosures**](https://support.longbridge.global/topics/misc/dolphin-disclaimer) ### Related Stocks - [09863.HK](https://longbridge.com/en/quote/09863.HK.md) - [ZK.US](https://longbridge.com/en/quote/ZK.US.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**