What changed
$LI — BUY 📊 | 6 MONTHS THESIS
🎯 latest | Rev $21.2B | EPS $-2.09 vs $-2.08 🔴
💡 Consensus expects continued losses and margin erosion due to China's EV price war, but we project gross margin recovery above 20% in 2025 driven by scale efficiencies and the higher-margin L-series. The recent earnings report is being misread as deterioration when it was essentially in-line, resetting the bar too low.
📉 Reward/risk: 2.3:1
🏢 Business Quality: 7/10 - Leading premium smart EV brand in China with consistent delivery growth (2024 deliveries +33% YoY) and a captive customer base, but profitability remains elusive due to heavy R&D and competition.
📊 Valuation: cheap - EV/Sales (NTM) of 0.7x vs. NIO at 1.2x and XPeng at 1.5x; excludes net cash of ~$4B. On P/B 1.1x vs sector median 1.8x.
📊 Our read: BUY. Full analysis →
https://stockduty.xyz/s/LI0623