By Jiahui Huang
Li Auto's shares rose sharply in Hong Kong, driven by improved sentiment following the Chinese automaker's strong sales.
The stock was recently 6.5% higher at 117.00 Hong Kong dollars, equivalent to US$14.91, on track for its highest closing level since February. That compared with the benchmark Hang Seng Index's 1.1% rise by midday.
The advance came after Li Auto, a plug-in hybrid specialist, said it delivered 40,856 vehicles in May, crossing the 40,000 mark for the first time this year. The automaker also outperformed rival XPeng, which sold 33,525 units last month.
CCB International analyst Qu Ke said Tuesday's share-price gain was likely due to overall positive monthly sales, which boosted market sentiment.
Goldman Sachs on Monday raised its target price on Li Auto's American depositary receipts to US$35.30 from US$31.70, citing the automaker's better-than-expected gross profit and adjusted net profit. It also pointed to the company's brighter sales prospects.
"We expect the refreshed version of L series and MEGA Home to drive better volume in the second quarter to the third quarter," Goldman Sachs analysts Tine Hou and Sylvia Hu wrote in a note.
Li Auto is also taking another shot at the full-EV market, hoping for success this time around after missteps in its rollout strategy for the MEGA, its first battery electric car. After a delay from 2024 to 2025, the company is set to launch two fully electric SUVs in the third quarter, with the i8 releasing in July and the i6 in September.
Goldman Sachs expects the two models to be competitive and achieve monthly average volumes of 6,000 units and 10,000 units, respectively, helping to further boost the carmaker's volume growth in the fourth quarter.
Li Auto's artificial-intelligence push will also help it reduce research and development expenses, Goldman Sachs said.
Some analysts were more conservative on the company's sales-growth outlook for the rest of the year.
Whether Li Auto can regain robust delivery growth will largely depend on how consumers receive its new battery EVs, Morningstar's Vincent Sun said. Visibility on that front remains low, the analyst said in a note, lowering the fair-value estimate on Li Auto ADRs to US$31.00 from US$31.50.
Write to Jiahui Huang at jiahui.huang@wsj.com
(END) Dow Jones Newswires
June 03, 2025 01:42 ET (05:42 GMT)
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