Li Auto Stock Up As Q2 Earnings Beat, Outlook Sees Sales Topping Nio's

Li Auto (LI) beat earnings estimates for its fiscal second quarter on robust demand and gave a strong Q3 outlook that anticipates outselling EV rival Nio (NIO). Li Auto stock fell.


Losses narrowed to RMB 65.1 million ($10.1 million) from RMB 159.2 millions in the year-ago quarter. On a per-ADS basis, Li Auto lost one cent in Q2.

Year over year, revenue jumped 159% to RMB 5.039 billion ($780.4 million), driven by higher deliveries. The company started volume production of the Li One in November 2019 and released a refreshed 2021 Li One in May.

According to Yahoo Finance, analysts on average expected Li Auto to lose 4 cents a share. Reliable revenue estimates were not available.

Earlier, Li Auto disclosed selling 17,575 Li One SUVs, a hybrid-electric vehicle, in Q2. That marked a quarterly record and a 166% jump year over year. Free cash flow reached RMB 982.1 million ($152.1 million) last quarter.

For Q3, Li Auto expects to deliver between 25,000 and 26,000 electric vehicles, which would be an increase of 189%-200% from the third quarter of 2020. It sees revenue reaching RMB 6.98 billion-7.25 billion ($1.08 billion-$1.12 billion), an increase of 178%-189% from a year earlier. That prediction is subject to changes in market conditions, “in particular, the ongoing industry-wide semiconductor shortage due to the global Covid-19 pandemic,” Li Auto said.

For context, Nio on Aug. 12 forecast Q3 vehicle deliveries of 23,000-25,000, up 88%-105% vs. a year earlier, while beating Q2 views Aug. 12. Nio sees revenue of $1.38 billion-$1.49 billion, up 97%-113% vs. a year earlier.

IBD Live: A New Tool For Daily Stock Market Analysis  

Li Auto Stock

Shares fell 1.1% to 29.03, but rebounded from intraday lows below the 200-day line, Li Auto stock has formed an undefined base with a 36.76 buy point, according to MarketSmith chart analysis. Chinese rivals Nio and Xpeng Motors (XPEV) dropped 0.7% and rose 1.2%, respectively.

Tesla (TSLA), which EV sales in China, climbed 2.7% to 730.91, just clearing an aggressive entry at 730.

BYD (BYDDF) rose 2.4% to 33.60, working on a 36.01 buy point. The Chinese EV and EV battery giant disclosed in a filing late Friday that net profit in the first half of 2021 fell by 29% to 1.17 billion RMB, or $180 million, amid rising material costs. But revenue jumped 54% to 89.1 billion RMB at the Warren Buffett-backed EV maker, according to Forbes.

Nio, Li Auto and Xpeng are all likely to reveal August sales this week. Li Auto outsold its pure battery-electric rivals in July, so it has a high bar to live up to. The three Chinese EV startups are challenging Tesla in China, one of the world’s largest EV markets. They’re also ramping in Norway, another booming EV market, where Tesla dominates.

In August, Li Auto completed a dual primary listing in Hong Kong, to fend off risk from volatile China-U.S. relations. It raised $1.15 billion, saying it will use proceeds to fund growth, including new EVs and EV platforms. This follows a billion-dollar-plus U.S. initial public offering in mid- 2020.

Find Aparna Narayanan on Twitter at @IBD_Aparna.  


These Are The 5 Best Stocks To Buy And Watch Now

Stocks To Watch: Top-Rated IPOs, Big Caps And Growth Stocks

Find The Latest Stocks Hitting Buy Zones With MarketSmith

Harry Byrne

Related post