Market Insight | Li Auto-W drops more than 3% in the afternoon, Morgan Stanley says stock price has reflected negative factors, intense competition in the pure electric vehicle market

Li Auto-W fell more than 3% in the afternoon, as of the deadline, it fell by 2.93% to HKD 71.25, with a turnover of HKD 5.79 billion. Morgan Stanley stated that the current stock price of Li Auto reflects the potential for a 6-9 month increase, as well as unfavorable factors such as sales volume and profit margin. It initiated coverage with a "Neutral" rating for the first time, with a target price of HKD 82. The bank believes that the positive factors for Li Auto are decreasing while the negative factors are increasing. Due to the intense competition in the pure electric vehicle market, Li Auto recently expanded its product portfolio to include pure electric vehicles, posing a challenge. However, it is expected that extended-range electric vehicles and plug-in hybrid vehicles will continue to achieve faster growth. According to Li Auto's previously announced financial report for the first quarter of 2024, the company's first-quarter revenue was RMB 25.6 billion, a year-on-year increase of 36.4%, but a quarter-on-quarter decrease of 38.6%; the first-quarter delivery volume was 80,400 vehicles, a year-on-year increase of 52.9%, but a quarter-on-quarter decrease of 39%. In addition, in early June, some Li Auto employees stated that after a month of large-scale layoffs, Li Auto is recalling some key positions of the laid-off employees