Why EV Li Auto (LI) Stock Is Up 8% Today

November 29, 2021 6:58 AM EST
Get Alerts LI Hot Sheet
Price: $23.97 +2.22%

Rating Summary:
    11 Buy, 4 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 16 | New: 32
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Li Auto (NASDAQ: LI) shares are up over 8% in pre-open Monday after the company reported solid Q3 results.

The company reported deliveries of Li ONEs at 25,116 EV units for Q4, up 190% compared to a year ago, and from 17,575 delivered in Q2.

LI Auto also reported sales of RMB7.78 billion (US$1.21 billion), out of which RMB7.39 billion (US$1.15 billion came from EV sales. Vehicle margin climbed to 21.1% in Q3 from 18.7% recorded in Q2.

"Amidst the industry-wide chip supply shortage, we delivered 25,116 vehicles during the third quarter, growing 190.0% year over year and recording a new quarterly high, highlighting once again the compelling appeal of our 2021 Li ONE to family users. To mitigate on-going supply chain risks, we will continue to find solutions together with our supply chain partners. In light of our strong order intake and users’ rising acceptance of smart electric vehicles, we remain as enthusiastic as ever about our growth prospects,” said Mr. Xiang Li, founder, chairman, and CEO of Li Auto.

For this quarter, Li Auto expected to deliver between 30,000 and 32,000 EV units that will help the company deliver revenues between RMB8.82 billion (US$1.37 billion) and RMB9.41 billion (US$1.46 billion).

Morgan Stanley analyst Tim Hsiao reiterated an Overweight rating and a $49.00 per share price target on Li Auto after “solid” Q3 results.

Hsiao noted “an increase of ASP, +5% QoQ to Rmb294k, thanks to a rising mix of 2021 Li ONE and almost no impact from promotion for de-stocking of the 2020 version.”

On the higher Q3 vehicle margin, the analyst said it is a result of “a favorable sales mix and improving scale.”

Li Auto stock closed at $32.40 on Friday, nearly unchanged YTD.

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