Li Auto Inc. (NASDAQ: LI) set the ball rolling on the Chinese EV reporting season with strong fourth-quarter results that exceeded expectations. The company forecasts strong revenue growth and deliveries for the first quarter and confirmed its next premium SUV model is scheduled to launch in 2022.
Li Auto's Key Q4 Metrics: Li Auto reported fourth-quarter earnings of 2 cents per share compares to consensus for a loss of 2 cents per share.
Fourth-quarter net income came in at 107.5 million yuan or $16.5 million compared to a net loss of 106.9 million yuan in the third quarter and a net loss of $3.28 billion in the year-ago period. On a non-GAAP basis, the company reported a net income of 115.4 million yuan or $17.7 million, up from 16 million yuan in the preceding quarter.
The bottom-line performance reflected strong revenue growth and a sharp increase in interest/investment income.
Revenues jumped 65.2% quarter-over-quarter to 4.15 billion yuan or $635.5 million. It exceeded the consensus forecast of $586.51 million. The company had earlier guided fourth-quarter revenues to $457.8 million to $499.4 million.
The top-line growth was aided by a strong 64.6% sequential increase in vehicle sales to 4.06 billion yuan or $621.9 million. Vehicle deliveries in the fourth-quarter jumped 67% quarter-over-quarter to 14,464 units.
Vehicle margin, however, contracted 2.7 percentage points from the previous quarter to 17.1%.
Operating cash flow nearly doubled quarter-over-quarter to 1.82 billion yuan or $279.1 million, and free cash flow increased 113.2% to 1.60 billion yuan or $245.1 million.
Cash and cash equivalents, restricted cash, time deposits, and short-term investments stood at $4.58 billion as of Dec. 31.
"Against the backdrop of a once-in-a-century shift in the automotive industry to smart electric vehicles, the fourth quarter capped off a year of significant growth for our company," said Xiang Li, founder, chairman, and CEO of Li Auto.
The company attributed the strong demand for its vehicles to its distinctive product offering and superior user experience, made possible by its focused product strategy and its ability to scale up a consistent and high-quality manufacturing process rapidly.
Li Auto currently has one vehicle model in its line-up, named Li-ONE, a luxury mid-size crossover SUV, commercially launched in early 2020.
Q1 Guidance: Li Auto expects revenues of $450.6 million to $493.5 million, an estimated year-over-year increase of 246%-279% in the first quarter of FY21. The company guided first-quarter deliveries to 10.600-11.500 vehicles, up from 2,896 vehicles sold in the first quarter of 2020.
Earlier this month, the company reported January deliveries of 5,379 Li-One vehicles.
Li Auto is planning on its Changzhou factory's reconfiguration for its new model pipeline, especially the full-size premium SUV based on brand new architecture to be launched in 2022.
With the Shanghai R&D center's establishment, the company said it is expediting R&D across the board to provide safer, more convenient, and more refined products and services.
Li Auto shares, which plunged to the year's low of $23.52 intraday Tuesday, recovered and advanced 6.26% to close Wednesday's session at $28.68.
Price Action: Li shares are trading higher by 5.23% at $30.18 in premarket trading on the last check Thursday.
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