Li Auto (LI) guided high early Wednesday after topping first-quarter earnings estimates on the back of robust EV sales. LI stock raced past an early buy point and cleared an official breakout.
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Li specializes in premium hybrid-electric vehicles. It is starting to shift toward all-electric or battery-electric vehicles, catching up with Nio (NIO). The startup is starting to outstrip Nio as a lead rival to Tesla (TSLA) in China, amid an EV price war in that country.
Li Auto Earnings
Estimates: Analysts polled by FactSet expected Li Auto earnings of five cents per share, down 25.5% from seven cents a year ago. Revenue was seen almost increasing 92% to $2.731 billion.
Li has already disclosed that Q1 sales came in at 52,584 EVs, easily outpacing Nio sales, though at the lower end of its own forecast for 52,000-55,000 vehicles.
Results: Li Auto earnings of 20 cents a share on revenue of $2.74 billion. In local currency terms, Li’s earnings nearly tripled, year over year, and revenue nearly doubled.
Outlook: For Q2, Li expects to deliver 76,000-81,000 EVs, up sharply from a year ago. It has already reported a record 25,681 deliveries for April. The startup sees Q2 revenue of $3.53 billion-$3.77 billion, well above estimates. That would be up 177%-196% in local currency terms vs. Q2 2022, when Covid shutdowns affected production and sales.
LI Stock Jumps
U.S.-listed shares of Li Auto leapt 9.6% to 27.16 on the stock market today, extending a recent rally above the 50-day moving average.
LI stock offered an early entry at 26.37, just above the April 17 high. It’s been rebounding again after a recent breakout from a double-bottom base failed. Li Auto stock is flirting with an official buy point of 27.58.
Other China EV Stocks
The EV startup continued to outsell rivals Nio (NIO) and XPeng (XPEV) in the first four months of 2023, after outpacing them last year.
Li sold a record 25,000 cars in April, led by the popular new L7 SUV, a Model Y rival.
Shares of Nio, XPeng and Tesla all rose Wednesday after declining Tuesday. All are below their 200-day lines, with only XPEV stock above its 50-day.
Chinese EV giant BYD (BYDDF), which trades over the counter in the U.S., rallied 3.3% to 31.32 on Wednesday. That’s clearing a 31.17 cup-with-handle buy point.
Year to date, Li Auto stock flourishes a 35.4% gain. That compares with a 2.4% gain for XPeng and a 13.8% decline for Nio stock. BYD stock is up 26.7%.
Rival XPeng is set to report May 24. Nio has not announced a date.
‘Clear Favorite’ Startup
Li Auto continues to be one of the best-performing China EV stocks this year. Unlike many EV startups, Li Auto is profitable, though it has an inconsistent history of quarterly profits thus far.
The company has benefited from strong execution, including the ramp of new models in the premium SUV segment, analysts say.
In a May 5 note to clients, Deutsche Bank analyst Edison Yu said he expects a somewhat mixed Q1 because Li’s deliveries came in at the lower end of its own original outlook.
At the same time, Yu anticipates a “robust” Q2 delivery outlook. He cited the popularity of the new Li L7 SUV in part.
Among the startups, he calls LI stock the “clear favorite” that has shifted to higher gear.
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