一季度业绩超预期，对2025财年更加乐观

Leapmotor (9863 HK) More positive on FY25E after 1Q25 beat Target PriceHK$72.00(Previous TPHK$50.00)Up/Downside15.8%Current PriceHK$62.20 Maintain BUY.Leapmotor’s 1Q25 net lossofRMB130mn beat our priorforecastsonhigheraveragesellingprice(ASP)andGPM,aswellasunexpected contribution from the strategic cooperation. Webelieveitscostreductionefforts, driven by its undervaluedin-house R&Dcapabilities,havestarted to be reflected by its 1Q25 GPM and could be even more apparent afterall the models are shifted to the Leap 3.5 architecture in mid-2025. We raise ourFY25E sales volumeforecastby 15% to 0.55mn units. We projectbreakeven atanet level in FY25E, followed by a tenfold increase to RMB1.2bn for FY26E netprofit. China Auto Wenjing DOU, CFA(852)6939 4751douwenjing@cmbi.com.hk Ji SHI, CFA(852) 3761 8728shiji@cmbi.com.hk 1Q25 results beat on higher GPM.Leapmotor’s 1Q25 revenue was higherthan our expectation by 8%, partly due to its better-than-expected ASPdespite higher discounts.Its 1Q25 GPM rose 1.6ppts QoQ to 14.9%, arecord high,due in parttoanunexpected service income from the strategiccooperation with FAW.We estimate that its vehicle 1Q25 GPM widened bymore than 4ppts from 3Q24 with similar sales volume levels, which reflectsLeapmotor’s superb cost reduction capabilities.SG&A and R&D expensescombined were also higher than our forecast by RMB350mn.Accordingly,its 1Q25 net loss of RMB130mnbeatour forecast by about RMB350mn. Austin Liang(852) 3900 0856austinliang@cmbi.com.hk We have turnedmoreoptimisticabout itsFY25E sales volume andearnings.Weraise our FY25E sales volume forecast from 0.48mn units to0.55mn units, given stronger-than-expected salesperformanceand orderintake during AprtoMay. We liftourFY25E GPMforecastfrom 11.2% to12.1%,taking into account the contribution fromstrategiccooperation withother OEMs and better-than-expected cost reductioncapabilitiesrelated tothe Leap 3.5 architecture. Management indicatedthattheLeap 3.5couldcut the smart cockpit and autonomous drivingchip-relatedcosts by 30-40%comparedwiththeLeap3.0.WeexpectLeapmotorInternationaltocontribute ashare ofprofitsof RMB110mn in FY25E,based on our salesvolume forecast of 70,000 units for overseas markets. We also raise ourforecast for the combined SG&A and R&D ratios by 0.5ppts to 13.8% dueto higher-than-expectedexpenditures in 1Q25.Earnings/Valuation.WeraiseourFY25Enetprofitforecastfrom- RMB98mn to RMB118mn.We also believethat Leapmotor will achievemoresignificant profit growth in FY26E.Wemaintain our BUY rating andraise our target price from HK$50.00 to HK$72.00, based on 1.5x FY25EP/S(prior 1.3x),giventherecentlyimprovingmarket sentiment and highervisibility for Leapmotor’searnings.Key risks to our rating and target priceinclude lower sales volume and/or margins than we expect, and a sector de-rating. Source: FactSet Related Report“Leapmotor(9863HK)-CompetitivepricingforB10withstrong4Q24margins”-11 Mar2025 Disclosures& Disclaimers Analyst CertificationThe research analyst who is primary responsible for the content of this research report, in whole or in part, certifies that with respect to the securities or issuerthat the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the codeof conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to thedate of issue of this report; (2) willdeal in or trade in the stock(s)covered in this research report 3 business days after the date of issue of this report; (3) serve as an officer of any of theHongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies coveredin this report. CMBIGM RatingsBUY : Stock with potential return of over 15% over next 12 monthsHOLD: Stock with potential return of +15% to-10% over next 12 monthsSELL: Stock with potential loss of over 10% over next 12 monthsNOT RATED: Stock is not rated byCMBIGM :Industry expected to outperform the relevant broad market benchmark over next 12 months:Industry expected to perform in-line with the relevant broad marketbenchmark over next 12 months:Industry expected to underperform the relevant broad market benchmark over next 12 monthsGlobal MarketsLimited Address: 45/F, Champion Tower, 3 Garden Road, Hong Kong, Tel:(852) 3900 0888Fax: (852) 3900 0800CMB InternationalGlobal MarketsLimited (“CMBIGM”) is a wholly owned subsidiary of CMB International Capital Corporation Limited (a wholly ownedsubsidiary of China Merchants Bank) Important DisclosuresThere are risks involved in transacting in any securities.