Li Auto rating increased for purchase
2022.11.28 14:19
Li Auto rating increased for purchase
Budrigannews.com – Li Auto Inc.’s (NASDAQ:) haresare up 1.93 percent in midday trading on Monday after Jefferies issued a Buy rating and a $20.70 price target for the electric vehicle stock. According to Jefferies, investors’ concerns regarding cannibalization between L9 and L8 are exaggerated. According to channel checks, L8 typically receives 20% to 30% more new orders per day than Li One did before it was discontinued.
Twenty percent of L8’s customers left L9 due to tight budgets, thirty percent compare L8 to AITO M7 and Denza D9, and the remaining customers are drawn from BBA customer groups.
“Li Auto has a natural edge in terms of product differentiation given CEO Li Xiang is also the founder of Autohome,” analysts wrote in a note. The Li One became the top-selling SUV in the crowded RMB300K-400K market, demonstrating the company’s product capability. It was the first SUV with super large space (three rows for six seats), no range anxiety (EREV solution), and four screens in the cabin.
“With comprehensive product offerings, Li Auto is well positioned to carve out its niche catering to family customers and taking share from BBA,” they added.
Due to its precise product positioning, operational efficiencies, and first-mover advantage in the hybrid market, Li Auto is Jefferies’ favorite NEV startup.
According to the analysts, “We expect Li Auto to see net profit of RMB2.7bn/7.4bn in 2023/2024 considering the better economies of scale driven by the increasing portion of shared parts of upcoming L series models.”
