China EV Maker Li Auto’s Shares Soar Nearly 14% To Eight-Month High As Sales Nearly Double, Loss Reverses

Shares in China electric vehicle maker Li Auto soared by 13.9% to an eight-month high of $28.22 in Nasdaq trading today after it said first-quarter sales nearly doubled from a year earlier and a year-earlier loss reversed to profit.

Sales in the three months to March at the premium SUV maker founded by Chinese billionaire entrepreneur Li Xiang rose by more than 96% year-on-year to $2.7 billion. Net profit totaled to $136.0 million in the first quarter, compared with a $1.5 million net loss in the first quarter of 2022, helped by new models.

Li Auto’s shares have gained 40% in the past year; that compares with a 48% plunge in the stock price of U.S.-listed Chinese EV makers XPeng and a 36% drop for rival Nio. Li Auto intends to launch EVs with advanced driver assistance systems for city scenarios this year, according to a report by Morgan Stanley this month. “Management aims for the feature to be enabled in 100 cities by the end of the year,” said Morgan Stanley, which has a price target of $30 on Li Auto’s U.S.-traded shares.

Li Auto, though not as well-known globally as Warren Buffett-backed BYD, is part of a mainland EV industry that is benefitting from strong sales in China, the world’s largest EV market. Retail sales of new energy vehicles in China jumped 85.6% year-on-year in April to 527,000 vehicles, according to the China Passenger Car Association, Xinhua News Agency reported yesterday. Major domestic brands accounted for 70.5% of total NEV sales in China, it said. For the first four months of 2023, retail NEV sales in China rose 36% year-on-year to 1.84 million units, vastly outperforming the 1.3% overall decline in overall retail sales of passenger cars to 5.9 million units during the period, Xinhua said. EVs were the focus of Auto Shanghai, the country’s biggest auto show so far this year, held last month. (See related post here.)

Li Auto was founded by Li Xiang in 2015, following an earlier career in the Internet industry. Li Auto, whose investors include Chinese Internet billionaire Wang Xing and delivery service Meituan, began trading on the Nasdaq in July 2020; its shares have also traded in Hong Kong since Aug. 2021.

Li is worth $5 billion on the Forbes Real-Time Billionaires List today.

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@rflannerychina