Haitong International Cuts LEAPMOTOR TP to HKD54.5; Short-term Profit Pressure Unchanged Growth Logic

Haitong International issued a report stating that LEAPMOTOR (09863.HK) +0.340 (+0.820%) Short selling $176.25M; Ratio 26.869% faced short-term pressure in 1Q26 results, but strong overseas growth and robust sales performance underpin its view that near-term profit pressure does not alter the companys growth logic, while globalization and brand upgrading open up long-term potential.LEAPMOTORs 1Q26 revenue reached RMB10.82 billion, up 8% YoY but down 48.5% QoQ due to the Lunar New Year seasonality. Gross margin was 9.4%, down 5.5 ppts YoY and 5.6 ppts QoQ, mainly affected by product mix changes and reduced strategic partnership business. Net loss amounted to RMB390 million, widening YoY and swinging from profit to loss QoQ, primarily due to lower gross profit and increased R&D and selling expenses. In terms of sales volume, the company delivered 110,200 vehicles in 1Q26, up 25.8% YoY. Of which, overseas sales reached 40,900 units, surging 442% YoY and accounting for 37.1% of total sales, a record high, indicating accelerating global expansion.Entering 2Q26, growth momentum further strengthened. April sales reached 71,400 units, up 74% YoY, marking a record monthly sales high among Chinas emerging EV makers. As of end-March 2026, the companys cash reserves totaled RMB30.63 billion, providing solid support for upcoming product cycles, technology R&D and overseas expansion.The broker noted that LEAPMOTORs overseas strategy has entered a deep localization phase, with its profitability model and globalization path becoming clearer. The company maintained its 2026 overseas sales target of 100,000 to 150,000 units. Considering that overseas wholesale volume from January to April has stabilized at 13,000 to 14,000 units per month, the probability of exceeding 150,000 units for the full year continues to rise. Management remains confident about the full-year sales target. On profitability, it acknowledged ongoing disturbances from raw material costs, the international environment and industry price competition, but overall operating trends remain on an upward trajectory.Haitong International revised its total revenue forecasts for 2026 to 2028, raising estimates by 14%, 1% and lowering by 3%, to RMB103.5 billion, RMB133.8 billion and RMB161.9 billion, respectively. The companys 2026 model pipeline maintains a significant advantage over industry peers, with domestic market share expected to improve and overseas markets likely to sustain high growth. With reference to comparable companies, the broker assigned LEAPMOTOR a 0.65x 2026 PS and cut its TP from HKD61.44 to HKD54.5, while maintaining an Outperform rating. (da/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-19 16:25.)