#idea #stock #analytics Li Auto: a rising star in the elect | WhiteRaven Capital
#idea #stock #analytics
Li Auto: a rising star in the electric car market
LI focuses on an electric car additionally equipped with a small gasoline engine (EREV), which is used to recharge the battery when needed. This makes it possible not to get stuck on the freeway with a dead battery and increases the range to 1,080 km.
Given the as yet underdeveloped infrastructure for electric vehicles outside of major cities, the EREV, which combines the best of both automotive worlds, is the best option for the "people's car".
The numbers speak for themselves about the success of this concept. Li Auto began selling its Li One (https://www.lixiang.com/) 6-seat luxury smart SUV in late 2019, and since then its sales have grown exponentially. For example, in April alone, sales rose 111.3% y/y to 5,539 units.
Incredible sales growth and production scaling have boosted gross margins to 16.9%, up from 8.4% a year earlier. That said, the company said the pace of its production and sales has slowed the chip shortage. And that won't last forever...
The Li One has a flat retail price of 338,000 yuan ($52,95 thousand), which, combined with its roomy size, premium level, and electronics equipment, - makes the model incredibly popular.
The CEO said the company plans to ramp up production to 10,000 vehicles as early as September this year. In addition to the Li One, the company is looking to expand its product line by developing new cars.
There is no sense to look at the fundamental indicators: the main drivers of the company's growth are the dynamics of sales and margins. So far, LI is doing just fine with them.
Given a revenue forecast of $2.91 billion in 2021, which implies 101% growth, Li Auto is trading at a forward P/S of 6.2x (a measure of how much an investor pays per unit of revenue).
The consensus forecast of Wall Street analysts for Li Auto securities is $37.83, which from the current $23.65 suggests a 60% upside.
Of the 15 analysts, 13 recommend buying Li Auto stock and 2 recommend holding.
