BEIJING, February 26 (TMTPost)-- The American depositary receipts (ADRs) of Li Auto Inc.leapt as much as 19.9% after the Chinese electric vehicle (EV) manufacturer posted stronger-than-expected sales despite ongoing price war in the whole industry, especially in its homeland. Shares  closed 18.8% higher to US$41.34, the highest since November 20, 2023.

Credit：TMTPost

For the quarter ended December 31, 2023, Li Auto’s total revenue increased 136.4% year-over-year (YoY) to RMB41.73 billion (US$5.88 billion), better than Wall Street estimated RMB39.8 billion. Vehicle sales was RMB40.38 billion with a 20% YoY increase, and vehicle margin edged up 2.7 percentage points YoY to 22.7%.  The net income soared 2,068.2% YoY to RMB57.5 billion that quarter, and non-GAAP net income was RMB4.59 billion, up 374.2%. Diluted net earnings per ADS, or American depositary share, was RMB5.32, compared with RMB0.25 the same quarter of 2022. Gross profit was RMB9.79 billion, representing a 174.4% YoY increase, and gross margin increased to 23.5%, up from 20.2% a year earlier.

For the year 2024, Li Auto first achieved profitability in a year, the first of the the major Chinese EV startups to turn a profit in a full year. It recorded net income of RMB11.81 billion, compared with net loss of RMB2.03 billion in 2022. The bottom line was way above expectation of RMB8.91 billion. Non-GAAP net income was RMB12.2 billion, an increase of 58,494.3% from 2022. Diluted earnings per ADS was RMB11.10, compared with RMB20.7 in 2022.The annual revenue surged 173.5% YoY to RMB123.85 billion, and RMB120.29 out of them came from vehicle sales with a YoY growth of 172.7%.  Gross profit was RMB27.5 billion, representing an increase of 212.8%, and gross margin was 22.2%, up from 19.4% in 2022.

Li Auto attributed growth of vehicle sales in the fourth quarter to increase in delivery,  partially offset by the lower average selling price due to different product mix between two quarters. The robust growh fo net income that quarter was partially due to non-cash tax benefit of RMB1.99 billion for the release of valuation allowance on certain deferred tax assets.

Li Auto delivered a record number of 131,805 vehicles in the fourth quarter, topping its guidance range of 125,000 to 128,000 units. That represents a 184.6% YoY increase, while the third quarter saw an almost four-fold increase. Looking forward, Li Auto expected revenue in the first quarter of 2024 to be between RMB31.25 billlion and RMB32.19 billion, a YoY increase of 66.3% to 71.3%, and delivery that quarter to be between 100,000 and 103,000 vehicles, the lowest since the second quarter of 2022. The guidance represented a YoY increase of 90.2% to 95.9% and a quarter-over-quarter (QoQ) decrease of 21.9% and 24%. It missed analysts’ projection of 116,604, but indicated Li Auto can deliver more than 45,000 vehicles in March, when it plans to replace product lineup with new models. Therefore, the delivery guidance suggested Li Auto would have a strong ramp-up of sales given the EV maker has delivered over 30,000 units and delivery in the current month is expected to be around 25,000 units.

“Undeterred by the fiercely competitive NEV market in 2023, Li Auto achieved an outstanding performance with its three Li L series models, “ Li Auto Chairman and CEO Li Xiang noted. With the significantly increasing scale, continued research and development advancement, and consistently improving operating efficiency throughout the year, 2023 marks Li Auto’s best financial performance yet, setting a solid foundation for its growth to diversify its product matrix and cater to a broader range of user needs in 2024, Li said.  In 2024, healthy profitability and capital strength will support Li Auto to further strengthen research and development, expand business scale, and lead the rapid transformation of China’s new energy vehicle (NEV) market, the chief financial officer Li Tie said.