HSBC Research lowers Li Auto's target price to 67 yuan, expects continued pressure on first-quarter performance

HSBC Research published a report indicating that Li Auto (02015.HK) had weak performance in the fourth quarter of last year, with a net profit of RMB 6.5 million, roughly in line with expectations. Looking ahead to the first quarter of this year, the bank expects continued pressure, forecasting a loss of RMB 1.9 billion, with quarterly sales expected to drop by 20% to approximately 87,000 units, mainly affected by seasonal factors in the industry. Additionally, before launching new models, discounts may need to be offered to reduce inventory, and rising metal prices are increasing costs.

The bank has lowered its revenue forecasts for Li Auto for 2026 and 2027 by 19% and 16%, respectively, with corresponding profit forecasts reduced by 70% and 26%. The "Hold" rating is maintained, with the target price for Li Auto's Hong Kong stock reduced from HKD 72 to HKD 67, and the target price for Li Auto (LI.US) in the U.S. stock market lowered from USD 18.6 to USD 17.2