Li Auto’s market value was surpassed by Sailis!

As of the close of June 19, Sailis Group closed 100.10 yuan/share, down 0.25%, the total market value of 151.151 billion yuan, more than 156.923 billion Hong Kong dollars (about RMB 145.865 billion yuan) market value, up 3.94%, closing at 73.95 Hong Kong dollars/share. The same is true for US stocks, Li Auto closed at 18.35 US dollars last night, down 0.49%, the total market value 19.47 billion US dollars (about RMB 141.294 billion US dollars), the same less than Sailis Group. From the global automotive market, Sailis market value ranked 22nd, while Li Auto ranked 23rd.

From a timeline perspective, the decline in Li Auto’s share price began in March.

On February 26, Li Auto handed over the best financial report in history, with revenue of 123.85 billion yuan in 2023, becoming the first new car-making force in China with annual revenue exceeding 100 billion yuan, and net profit of 11.81 billion yuan. It is the first year that Li Auto has achieved profitability since delivery. Affected by the financial performance, Li Auto’s share price soared 25.45% on the same day, reaching a maximum of 182.9 Hong Kong dollars, just one step away from the peak of 185.5 Hong Kong dollars.

On March 1st, Li Auto released the first pure electric model – MEGA, priced at 559,800 yuan, which will be delivered on March 11th. At the press conference, Li Auto CEO Li Xiang said that MEGA will be the next explosive product of Li Auto, and he is confident that it will become the first in sales of more than 500,000. At the same time, Li Auto’s L series models have been updated, and the product power of the new L series has been greatly improved, but the price is basically the same as the old model, achieving no incremental price increase.

However, after the listing of MEGA, Li Auto did not announce the order for a long time, and the market speculated that the order volume may be far less than expected. That is, from this point on, Li Auto’s share price began to decline. MEGA fell 10.71% on the first trading day after listing, and 5.00% the next day. As of press time, Li Auto closed at HK $73.95, down 58.73% since trading on March 4.

Looking back at Cyrus, thanks to the stable performance of AITO’s brand, its share price has rebounded sharply since the Spring Festival of the Year of the Dragon, rising from a low of 54.60 yuan to the current 100.10 yuan, a cumulative increase of 78.43%, in sharp contrast to Li Auto. During this period, AITO reduced the price of its new M7 model and released a new M5 model.

From the current point of view, Li Auto has begun to achieve steady growth with its models. According to the new power sales rankings in May according to the statistics of "Automotive Industry Concern", Li Auto ranked first with 35,020 units, an increase of 23.8% year-on-year. It is worth mentioning that as a strong competitor of Li Auto, the sales of Cyrus, which is mainly based on AITO, were 32,377 units. It is understood that this is the second time that Li Auto has surpassed Cyrus Automobile this year, and the previous sales in January and March were overtaken by Cyrus Automobile.

From the perspective of single-week sales, according to the weekly sales data officially released by Li Auto, AITO will sell 9,300 units in a single week in the 24th week of 2024 (June 10 to June 16), still after Li Auto, which sold 10,500 units. However, the gap between the two car companies is gradually narrowing. Compared with the data of the 23rd week, Li Auto’s sales decreased by 400 units month-on-month, while Q Jie increased by 400 vehicles.

It is understood that Li Auto will be 800,000 vehicle delivery target, adjusted to 56-640,000 vehicles, but 1-5 months cumulative delivery of 141,200 vehicles, to 560,000 vehicles calculation is only 18.96%, the next Li Auto monthly delivery needs to be more than 60,000 vehicles, the pressure is huge.

Even so, Li Xiang, CEO of Li Auto, said on the earnings call, "We are very optimistic about the next monthly sales performance. After the price strategy adjustment, the order volume of L7, L8 and L9 continues to grow, and the company has no plans to reduce prices in the future." It is understood that Li Auto’s performance guidance for the second quarter is to deliver 105,000 to 110,000 vehicles, and Li Auto delivered 60,800 vehicles in April-May. Even according to the lowest line of delivery guidelines, Li Auto will deliver an average of 44,200 vehicles in the next June. The pressure is not small. "Considering the severe challenges we experienced in March, I think the second quarter will be the toughest quarter the company has experienced this year," said Li Tie, chief financial officer of Li Auto.

After the failure of MEGA’s listing, Li Auto conducted a deep reflection internally and proposed a series of measures, including layoffs and the merger of sales and delivery departments, with the aim of selling more cars. From the perspective of the future market, Li Auto will not release new cars this year, and can only rely on the ideal L6 to achieve market growth. However, the new M5, which is also an SUV with a similar price range, is a competitor that Li Auto cannot avoid. During the year, AITO will also release the M8 model, positioned between the M7 and M9, and competitors are also targeting it. Based on the performance of the M7 and M9 models, the M8 is likely to be a model with good market expectations. Coupled with the increasing number of hybrid models on the market, the ideal L6 may not have such a good time, and Li Auto may not have such a good time either.

In 2023, Li Auto had an extremely comfortable year, with revenue of 100 billion yuan and profits of 10 billion yuan, which made many car companies envious. After entering 2024, with the internal volume of the automobile market, the failure of MEGA and the explosion of AITO, Li Xiang had to reflect deeply. Li Auto was destined to have a difficult year.