Key Takeaways:
- Li Auto swung to a net loss of RMB2.29 billion in the first quarter
- Vehicle gross margin collapsed to 6.1% from 19.8% a year earlier
- Q2 delivery guidance of 95,000 to 100,000 units implies a decline of as much as 14.5%
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Li Auto posts RMB2.29B loss as vehicle margin plunges to 6.1%
Key Takeaways:
- Li Auto swung to a net loss of RMB2.29 billion in the first quarter
- Vehicle gross margin collapsed to 6.1% from 19.8% a year earlier
- Q2 delivery guidance of 95,000 to 100,000 units implies a decline of as much as 14.5%
Li Auto Inc. (02015.HK) reported a first-quarter net loss of RMB2.29 billion (US$331.9 million), swinging from a profit of RMB650 million a year earlier, as vehicle margins collapsed and pricing competition intensified in China's new energy vehicle market.
"Our first-quarter gross margin reflected our user-centric measures related to Li i6 deliveries, as well as raw material price fluctuations and our model refresh cycle," Chief Financial Officer Tie Li said. "As delivery rebounds drive economies of scale and our updated product portfolio gains traction, we expect a gradual improvement in profitability."
Total revenue fell 11.4 percent from a year earlier to RMB23 billion (US$3.3 billion), missing the prior quarter's RMB28.8 billion. Vehicle sales revenue dropped 12.7 percent to RMB21.5 billion, while vehicle gross margin tumbled to 6.1 percent from 19.8 percent a year ago and 16.8 percent in the fourth quarter. Gross profit plunged 66 percent to RMB1.8 billion, and overall gross margin narrowed to 7.9 percent from 20.5 percent. Free cash flow was negative RMB7.4 billion, compared with negative RMB2.5 billion a year earlier and positive RMB2.5 billion in the prior quarter.
Deliveries rose 2.5 percent year over year to 95,142 vehicles in the quarter, but the company forecast second-quarter deliveries of 95,000 to 100,000 units, representing a decline of as much as 14.5 percent from a year earlier. Revenue for the current quarter is expected between RMB24.1 billion and RMB25.4 billion, down 16 percent to 20.2 percent year over year.
The earnings miss and weak guidance underscore the pricing pressure facing Chinese EV makers as competition from BYD Co., XPeng Inc. and NIO Inc. intensifies. Li Auto's cash and cash equivalents stood at RMB42.8 billion as of March 31, down from RMB56.7 billion at the end of December, though the company is executing a US$1 billion share repurchase program. Investors will watch the launch of the all-new Li L8 at the end of June for signs of a demand recovery and margin stabilization.
This article is for informational purposes only and does not constitute investment advice.
