Chinese EV Automaker Li Explodes on Revenue Beat

Li Auto, China’s electric car startup, reported its first quarterly results since going public and saw its shares soar in Friday’s morning session. The stock skyrocketed as much as 25% after the company reported a top line beat for the third quarter.

Li Auto reported revenue that jumped 28.4% from the previous quarter. Deliveries increased 31% quarter-over-quarter and gross margins also rose.

The company had went public back in July after pricing its IPO at $11.50 per American Depositary Share (ADS). The stock has seen gains of around 100% in the last 30 days.

Mr. Xiang Li, founder, chairman and chief executive officer of Li Auto, commented, “This is our first quarterly earnings release as a public company, and we are pleased to announce robust third quarter results reflecting not only our strong growth momentum driven by the outstanding value proposition of our products, but also our relentless pursuit of operating efficiencies. We delivered 8,660 Li ONEs in the third quarter, representing a 31.1% quarter-over-quarter increase and setting a new quarterly record. Cumulative deliveries in 2020 at the end of October reached 21,852 vehicles. This is a strong testament to the competitiveness of the Li ONE. For the fourth quarter of 2020, we expect our growth momentum to continue with deliveries reaching 11,000 to 12,000 vehicles.”

“In terms of R&D, we will further increase our investment in this regard and continue to leverage technology to create value for users and optimize our user experience. Through product and technology innovations, we are committed to providing our users with safer, easier and more cost-effective travel solutions, ensuring we live up to their support and trust.” concluded Mr. Li.

Mr. Tie Li, chief financial officer of Li Auto, added, “We are pleased to report our third quarter financial and operating results with 28.9% quarter-over-quarter growth in total revenues driven by our record quarterly vehicle deliveries, as well as gross margin expansion, which increased to 19.8% compared with 13.3% of the second quarter. In the third quarter, we generated operating cash flow of RMB929.8 million, 105.8% higher than the prior quarter, which demonstrated our operational efficiency and successful cash flow management strategy. Looking forward, we will continue investing in both R&D and direct sales and servicing network expansion, as product iteration and sales channel integrity are the key components of our success.”

Chinese electric vehicle rivals of the company initially saw gains as it rode Li Auto’s momentum, however that came to a stop when Citron put out a note n Twitter on why EV maker NIO will fall to $25 a share. NIO has seen gains of 1000% YTD.

“NIO has found itself in unchartered territory that can never be justified by its current standing in the China EV market or its near-term prospects,” read the note from Citron Research.

The note went on to say, “It is time for investors to rotate out of NIO, enjoy your profits and look for the next disruptive technology.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.