--- title: "Leapmotor (Trans): Q2 GPM guide at 12–13%; confident to hit 1m units" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/40830097.md" description: "Below is Dolphin Research's Trans of $LEAPMOTOR(09863.HK) Q1 26 earnings call. For our earnings take, see 'Leapmotor: Aiming for 1mn, is GPM slipping first?'. I. Key highlights: 1) Guidance — Q2 26 delivery guidance of 240–250k units (April alone exceeded 70k)..." datetime: "2026-05-15T13:52:06.000Z" locales: - [en](https://longbridge.com/en/topics/40830097.md) - [zh-CN](https://longbridge.com/zh-CN/topics/40830097.md) - [zh-HK](https://longbridge.com/zh-HK/topics/40830097.md) author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)" --- # Leapmotor (Trans): Q2 GPM guide at 12–13%; confident to hit 1m units **Below is Dolphin Research's Trans of** $LEAPMOTOR(09863.HK) **1Q26 earnings call. For our earnings take, see** [**Leapmotor: Aiming for 1mn, but GPM slips first?**](https://longbridge.com/en/topics/40828785)**.** **I. Key takeaways** 1\. **Guidance**: 2Q26 deliveries guided to 240-250k units (Apr already topped 70k units). **GPM to improve vs. 1Q26 to ~12%-13% (still below 4Q25).** Full-year deliveries target of 1mn unchanged (H1/H2 split ~36%/64%). Full-year net profit target of RMB 5bn remains for now, but there is downside risk from raw materials, geopolitics and auto market volatility in H2. Overseas sales guidance of 100-150k units unchanged, with 1Q26 performance materially lifting the odds of hitting the 150k upper bound. 2\. **1Q26 revenue and margins**: Revenue RMB 10.8bn (+8% YoY), driven by higher vehicle and component deliveries, partly offset by lower ASP on mix shift. Overall GPM was 9.4% (~10%), while vehicle GPM was 7%+ (down YoY; FY25 vehicle GPM 11%+). The YoY GPM decline was due to: (1) smaller 1Q volumes per seasonality with lower utilization of capacity and component inventories; (2) mix shift from C-series to higher B-series contribution (B-series GPM slightly below C-series); (3) limited impact from raw material increases in 1Q26 as key inputs were pre-stocked in 4Q25. Overall GPM was ~200bps above vehicle GPM, mainly from projects with strategic partners. 3\. **Cash flow and liquidity**: 1Q26 operating cash flow was -RMB 6.6bn, and FCF -RMB 7.4bn. Cash and equivalents, FV assets and bank deposits totaled RMB 30.63bn, providing ample liquidity. 4\. **Attributable net loss widened**: 1Q26 net loss to shareholders increased YoY, mainly on lower GPM and higher expenses. The 'major variance item' includes ~RMB 700mn of subsidies timing, similar to last year (subsidies received but recognition takes time). **II. Call details** **2.1 Management remarks** 1\. **Deliveries** a. 1Q26 total deliveries were 110k units, with overseas \>40k, a record high (+42% YoY). b. Apr deliveries exceeded 70k units, ranking No.1 among NEV newcomers. Overseas deliveries topped 14k units in Apr. c. New-order and test-drive data hit records: orders topped 10k within 48 hours of launch; D19 received \>15k orders within 15 days; multiple models topped 8k monthly sales. Cumulative B-series deliveries exceeded 230k. 2\. **Products and launches** a. A10: a global model focused on democratizing tech, the first at the RMB 100k price point to feature LIDAR + OTA, with Qualcomm 8295 + 8650 chips and oil-cooled e-drive. Debuted at the Brussels show on Jan 11, targeting Europe in 3Q26. b. D19: launched on Apr 16 at ~RMB 220k. The EREV sports a large range-extender battery with \>500km EV-only range, CATL cells and a 1000V HV architecture; total compute 1,280 TOPS with ADAS; positioned as a RMB 300k-segment SUV alternative. The company targets a stable 10k units per month for D19. c. D99: 10th-anniversary edition debuted at Auto China, with pre-sales in Jun and deliveries from Jul, targeting the RMB 300k MPV market. d. Lafa5 Ultra: unveiled at Auto China in Apr at ~RMB 150k, aimed at younger buyers. 0-100km/h in 5s and City NOA fill a gap in the RMB 150k pure EV segment; cumulative sales exceed 20k since launch, ranking No.1 in its niche. e. C-series refresh: facelifts complete and on sale in Jun. C-16 and C-10 receive major mid-cycle upgrades with notable product improvements; C-11 gets a mild refresh. 3\. **R&D and tech platform** a. Central domain controller: first installed on D19, using a dual-chip and high-capacity storage architecture with dynamic compute allocation by driving scenario. GPU/CPU focus on infotainment with full hardware utilization, and cabin-drive data exchange at millisecond level. b. In 2026, C- and B-series will adopt LEAP 3.0 and LEAP 3.5 architectures, bringing higher-level ADAS to non-premium models. 4\. **Channels** a. As of Mar-end, the sales and service network covered 295 cities (+18), with 993 stores and 500+ service sites. County-level network has 613 registered outlets. b. 1Q26 EV share rose to 4.22%, ranking No.1 among NEV newcomers. Test drives rose \>10% YoY, and a six-star store grading system is being rolled out to lift conversion. c. Services: 200k+ customers booked maintenance; 1.2mn+ customers visited for service. 122 stores serve 4k+ customer groups, with customer satisfaction \>90% and NPS ~59.8%. 5\. **Overseas** a. 1Q26 exports topped 40k units (+42% YoY). Mar registrations rose YoY across 16 European countries (12 countries +726% YoY); registrations exceeded 5k in Mar and 4k in Apr, retaining No.1 BEV position in Europe. b. As of Mar-end, ~1,000 stores were established across 40+ markets in Europe, Middle East, Africa and APAC (Europe 850+, APAC 50+, Americas 30+). c. The Spain plant is slated to start production in 3Q26 for Europe. Stellantis noted in its announcement that a related plant may be sold to Leapmotor International, with both sides conducting prudent evaluation. d. South America is scaling rapidly, with a Brazil localization plan in progress. In SE Asia (Indonesia, Malaysia, Thailand), competitive strategy has been adjusted, and performance has improved notably vs. last year. 6\. **ESG** a. Received MSCI AA for three consecutive years; the global sustainability rating was upgraded from Copper to Zero, lifting the overall percentile from the top 35% to top 15%. **2.2 Q&A** **Q: What was 1Q26 vehicle GPM, and how do you break down the change drivers? Any changes to 2Q26 volume and margin guidance?** A: 1Q26 overall GPM was 9.4% (~10%), and vehicle GPM declined vs. last year. FY25 vehicle GPM was above 11%, and 1Q26 vehicle GPM was 7%+. The decline reflects: first, smaller 1Q26 volume per seasonality while capacity and component buffers were higher, reducing utilization; second, mix shift as B-series contribution increased vs. C-series last year, while B-series GPM is slightly lower; third, limited raw material impact in 1Q as key materials were pre-stocked last year to cover 1Q production. **The 2Q26 delivery guide remains 240-250k units, with Apr already \>70k, and May to be disclosed on Jun 1. We are confident in hitting the 2Q target. On margins, 2Q should improve vs. 1Q but not return to 4Q25, landing in the 12%-13% range.** **Q: How is the 2026 overseas delivery target tracking? What are the capacity and localization plans in Europe, SE Asia and South America?** A: The 2026 overseas guidance is 100-150k units. 1Q26 overseas sales were very strong, and 1Q plus Apr could have been even better but for minor shipping disruptions. We are not changing the guide, but based on 1Q performance, **the probability of hitting the 150k upper bound has increased significantly.** **For key markets, Europe production is centered on the Stellantis partnership. The oft-mentioned Spain plant is on track to start in 3Q26 for Europe.** Stellantis also indicated in a recent announcement that the plant may be sold to Leapmotor International, and shareholders on both sides are evaluating cautiously. From Leapmotor and Leapmotor International's perspective, European localization primarily leverages Stellantis capacity, while we also aim to secure some in-house capacity to accelerate future product introductions. South America is growing very fast this year. Stellantis has ~30% share in South America and treats it as a priority market, creating strong synergy, and our sales have ramped quickly since launch there. We plan local production in Brazil. In SE Asia (Indonesia, Malaysia, Thailand), competition is intense. We are adjusting strategy, and performance has improved materially vs. last year. **Q: What are 1Q26 and full-year EU revenue, the ASP trend, and any plan for a second higher-end brand?** A: EU revenue can be approximated by registrations times ASP. ASP is down vs. last year, which is understandable given rising NEV penetration and increasing supply, similar to China. Carbon credit revenue will also decline. We reached an agreement with Stellantis on carbon credits late last year, and execution is on track. On the second brand, management has disclosed some high-level info, but details remain confidential. What we can confirm is that a second brand is planned, with a product unveiling by year-end or by mid-next year at the latest, and market launch by 2H next year at the latest. The second brand will be positioned differently from the first to support sustained growth. **Q: How long will pre-stocked raw materials last, and when will margin be affected? Can faster overseas growth materially contribute to profits?** A: We anticipated raw material increases in 4Q25 and pre-stocked, so 1Q26 impact was limited. But the stock will run down, and key material price increases are not over. **From 2Q26, raw material pressure will start to show, but the impact on 2Q margin should be manageable, supporting the 12%-13% guide.** In 3Q-4Q, if lithium carbonate, memory and precious metals continue to rise and retail prices stay unchanged, the GPM impact will be larger. Some peers have started to adjust retail prices. In H2 we will closely track material prices amid geopolitics; uncertainties are high, including Middle East conflicts, and no one can predict precisely. If the uptrend persists, the industry may need collective price hikes. If materials keep rising sharply, retail prices will ultimately have to go up across the board. Given the uncertainties, it is difficult to give precise answers now. On overseas, when Leapmotor International was formed with Stellantis, we emphasized integrity — we will honor commitments and not change agreements due to external shifts. Vehicle GPM overseas is not high for now, but consider two points: first, Leapmotor International turned profitable in its first full year in 2025; in 1Q26 it remained slightly profitable despite FX. Second, overseas volume is ramping quickly, and overseas stores now exceed 1,000. From our perspective, overseas requires light investment, delivering profits under a 'light-input' model. Capital outlays from both sides are not large, with results mainly driven by operational efficiency and brand momentum. From the CFO's view, our overseas investment is far lower than peers. Without this Stellantis model, we might have needed 10x the investment to achieve similar results, so the overseas contribution is well above reported profit — the saved investment is profit in another form. Building overseas from scratch — networks, market education, supply chain and financial services — would require massive time and capital, while this partnership delivers the current outcome with minimal input in the shortest time. **Q: How will production-line sharing, localized procurement, model planning and carbon credit attribution work with Stellantis in Europe?** A: We will share the production line with Stellantis in Europe. Stellantis-brand models will be made there, and Leapmotor will supply e-drive, cabin systems and some in-house controllers. When Leapmotor and Stellantis models are co-produced, we will form joint teams, consolidate sales targets, and jointly select suppliers to maximize scale and secure better pricing. We will also supply some components to Stellantis. Models under this model are expected to reach mass production in late 2027–2028, with small component supply starting in 2027 and larger scale after SOP, driving more meaningful P&L impact. Carbon credits will follow regulation and belong to the manufacturer/license holder. Under the current sales model, credits belong to Leapmotor (manufacturer and certificate holder). For models produced in Europe at the Stellantis plant or a plant acquired by Leapmotor International, the manufacturer and certificate holder will be Leapmotor International. Therefore, the carbon credits and related revenue will accrue to Leapmotor International and be used for model or brand promotion. **Q: What is the contribution from non-vehicle businesses (carbon credits, tech partnerships, etc.)? How does the subsidy timing variance affect results?** A: The main variance item is government subsidies. There was a ~RMB 700mn timing variance in last year's annual report and the same period last year as well. We did receive subsidies, but recognition takes time, similar to last year. On carbon credits and strategic partnerships, the ~200bps spread between overall GPM and vehicle GPM in 1Q26 mainly came from strategic partner projects. We had such revenue last year too; this year, revenue from the Hongqi collaboration already appeared in 1Q, with mass production starting in 4Q. We also supply parts to Stellantis, and discussions with FAW Group are underway, with major announcements expected in 2Q or 3Q. **Q: How did D19 sales and margins perform vs. expectations? Monthly sales target? Any change to full-year sales and profit guidance?** A: D19 sales exceeded expectations, with 15k orders in a short time and deliveries underway with very positive feedback. We have set a new goal for the D19 team — stabilize monthly sales at ~10k units to sustain D-series momentum and pave the way for D99. Per-unit margins are broadly in line with plan and prior expectations, while higher volume and improved mix will support overall profitability. **We are confident in stabilizing D19 at 10k units per month,** and D99 has drawn strong attention, supporting a constructive outlook. On the full-year delivery trajectory, 2Q26 is guided at ~250k units, and H1 can reach the 360k target, **consistent with the 1mn full-year target cadence — a typical 36%/64% H1/H2 split, and we are confident in the 1mn goal.** On profits, H2 raw material trends remain uncertain, with many macro variables. From our perspective, the RMB 5bn profit target appears achievable but does face risks (materials, geopolitics and market volatility). We are not adjusting the RMB 5bn target at this time, while acknowledging the risks. **Q: Timing and magnitude of C-series facelifts? 2Q26 overseas sales guide?** A: For the C-series, C-11 sees a mild refresh, while C-10 and C-16 are major mid-cycle updates with clear product upgrades. Facelifts will complete and go on sale in Jun, about a month from now. For 2Q26 overseas, Apr exceeded 14k units, and the quarter is expected at 40-50k, potentially above 50k if execution is strong. Leapmotor International's firm orders are higher, but conversion depends on global shipping constraints — we are working on multiple fronts to resolve bottlenecks, after which deliveries can step up. <正文结束\> **Risk disclosure and disclaimer (in Chinese):**[**海豚研究免责声明及一般披露**](https://support.longbridge.global/topics/misc/dolphin-disclaimer) ### Related Stocks - [09863.HK](https://longbridge.com/en/quote/09863.HK.md) - [QCOM.US](https://longbridge.com/en/quote/QCOM.US.md) - [03750.HK](https://longbridge.com/en/quote/03750.HK.md) - [300750.CN](https://longbridge.com/en/quote/300750.CN.md) - [HCCD.SG](https://longbridge.com/en/quote/HCCD.SG.md)