Morgan Stanley: Li Auto-W's downward adjustment of second-quarter guidance is expected, and the stock price trend depends on the i8 launch
Morgan Stanley lowered Li Auto-W's second-quarter delivery guidance to 108,000 units, a decrease from previous expectations, reflecting the impact of adjustments in the sales system. Although consumer demand may be lukewarm in the short term, order momentum is expected to gradually recover, and stock price trends will depend on the successful launch of the i8. Morgan Stanley holds an optimistic view on the market outlook for the second half of the year, believing that the new model cycle will drive performance recovery
According to the Zhitong Finance APP, Morgan Stanley released a research report stating that Li Auto-W (02015) recently lowered its delivery guidance for the second quarter from 123,000-128,000 units to 108,000 units. This means that the delivery volume in June is expected to be 332,000 units, a year-on-year decrease of 30%. Therefore, Morgan Stanley believes that the downward revision of guidance has largely been reflected in the poor performance of Li Auto over the past three weeks.
Morgan Stanley pointed out that the latest second-quarter guidance being lower than their expectations is attributed to adjustments in the sales system, which led to minor hiccups in the delivery of the L series facelift. They believe that the stock price of Li Auto will largely depend on the company's remedial measures to boost L series sales, and even more so on the successful launch of the i8 in July.
Morgan Stanley expects that consumers will remain lukewarm before the launch of Li Auto's i series, following the introduction of the YU7 by Xiaomi Group-W (01810). Additionally, the off-season and the suspension of local subsidies may also squeeze short-term orders. Nevertheless, Morgan Stanley believes that the impact of these factors should be temporary, and order momentum should gradually recover.
Morgan Stanley stated that it maintains an optimistic outlook for the second half of the year. They believe that the weak sales in June have not disrupted expectations for operational recovery in the second half of the year, and the arrival of new model cycles will lay the foundation for performance recovery in the second half. With the downward revision of expectations, the high-quality execution of the Li Auto team, lessons learned from last year's Mega series launch, and potentially more competitive pricing may bring surprises for the upcoming i8
