Morgan Stanley: Lowers the target price for LI AUTO-W to HKD 56, reiterates "Underweight" rating

According to the Zhitong Finance APP, JP Morgan released a research report stating that Li Auto-W (02015) first-quarter performance roughly met market expectations but was about 15% lower than the bank's forecast. The bank maintains a cautious long-term view on Li Auto, believing that the competitive market environment means limited potential for upward surprises in sales and profitability. The bank maintains a "reduce" rating on Li Auto, lowering the target price for Hong Kong stocks from HKD 60 to HKD 56, while the target price for Li Auto (LI.US) is reduced from USD 15.5 to USD 14.

Management proposed several strategies during the earnings call, including product portfolio upgrades. The new L9 and the upcoming L8 will strengthen the positioning of high-end SUVs, helping to gradually restore gross margins starting in the second quarter. In terms of overseas expansion, the L series EREV has entered the Middle East and Central Asia, with further expansion into Southeast Asia starting in May. The pure electric vehicle (BEV) will land in Europe in the second half of 2026, and the right-hand drive products will subsequently enter the Hong Kong and Singapore markets. In addition, the company's self-developed M100 AI chip and VLA large model are positioned as the core of next-generation technology.

However, Morgan Stanley pointed out that several Chinese competitors, including Nio, XPeng, Huawei, Xiaomi, ZEEKR, and Leapmotor, are launching EREV and BEV products that increasingly overlap with Li Auto's core products in terms of price, specifications, channels, and target family buyer groups, which may affect revenue growth momentum. At the same time, price competition, promotions, and inflation in input costs may continue to put pressure on profit margins