Credit: LI Auto

CLSA analyst starts coverage on LI Auto shares, sees 46% of upside potential

Written by Cláudio Afonso | | LinkedIn | Twitter

CLSA analyst Aaron Li initiated Monday coverage on Li Auto shares with a Buy rating and a price target of $49 per share, an upside potential of 46% based on Friday’s closing price.

Aaron believes the second model of the Chinese PHEV maker will “continue to attract family consumers based on its intelligent design and attractive price”.

The analyst said the company “is a new entrant among China’s electric automakers” enhancing the success of the first model.

“Its first model, Li ONE, achieved success in China’s family SUV market, and we expect its second model, the L9 (launched in 2Q 2022) to continue to attract family consumers based on its intelligent design and attractive price. Li Auto delivered 11k vehicles overall in May, showing strong supply resilience amid Covid-related disruptions in April and May,” the analyst wrote.

“We expect it to deliver c.160k-450k vehicles a year in 2022-2024, and forecast a strong revenue Cagr of 78% in 22-24CL. Our target price of US$49.00 uses a 12-month forward P/S valuation methodology, and sets Tesla as a benchmark. We initiate with a BUY rating,” he added.

Li Auto delivered 10,422 Li ONEs in July 2022, up 21.3% year over year with the cumulative deliveries of the Li ONE model reaching 194,913 units. As of July 31, 2022, the Company had 259 retail stores in 118 cities, as well as 311 servicing centers and Li Auto-authorized body and paint shops operating in 226 cities, the automaker said.

Last week, the Chinese charging service provider NaaS Technology announced a partnership with LI Auto enabling drivers to use in-vehicle maps/ App to locate partner charging stations. The service is scheduled to become available before the end of the third quarter.

Last year, NaaS delivered 55 million charges in 290,000 charging piles spread over 288 cities accounting for 18% of the Chinese public charging marketThe company went public on June 13 becoming.

Written by Cláudio Afonso | | LinkedIn | Twitter