Analyst Significantly Lowers Delivery, Profit Estimates For Nio Rival Li Auto: What You Should Know

Brokerage firm US Tiger Securities Inc on Tuesday significantly lowered its second-quarter delivery, revenue, and profit estimates for electric vehicle maker Li Auto Inc LI.

The Li Auto Analyst: US Tiger Securities analyst Bo Pei has maintained a buy rating and a $40 price target on the U.S. listed, Beijing-headquartered Li Auto.

The Li Auto Thesis: Li Auto’s deliveries in April were hit significantly last month due to supply chain disruptions linked to COVID-19 related lockdowns in China. 

Beijing-based Li Auto competes with local rivals Nio Inc NIO, Xpeng Inc XPEV and global EV leader Tesla Inc TSLA.

“We are updating our model to reflect the recent supply chain disruptions since late March caused by COVID lockdowns in China,” Pei wrote in a note.

“In April, Li delivered 4,167 Li ONE, down 62% month-on-month and the lowest level since February 2021, as over 80% of its suppliers are located in the Yangtze Delta region affected by the pandemic.”

Unlike rivals, Li Auto has just one model to sell and is working on launching more. Compared with Tesla, Li Auto is relatively younger and faces more uncertainties. Its next EV lineup is not expected to be available until 2023, and there is no guarantee it will be as successful as the Li ONE.

See Also: Tesla Giga Shanghai Production Rises To 80% On Easing COVID-19 Curbs

New Estimates: US Tiger Securities now estimates current quarter deliveries to be 20,211 Li ONE units, down by 42.5% over its earlier estimate. The brokerage also expects a wider loss for the three months ended June 2022 to 14 cents per share, from five cents a share estimated earlier. 

Revenue estimates for the second quarter have been lowered by 40% to $946.8 million.

For the full year, the brokerage estimates Li Auto to deliver 144,577 electric vehicles, 10% lower than its previous guidance.

Price Action: Li Auto closed 1.7% lower at $22.93 on Tuesday.

Photo courtesy: Li Auto