LEAPMOTOR(09863.HK)：A THIRD DOMESTIC SALES “SUPERSTAR” EMERGED(MSV HIT 30 000UNITS); MAJOR SHAREHOLDERS INCREASED H-SHARE HOLDINGS-格隆汇

机构：国泰君安国际
研究员：Ivan Wu

Leapmotor (or "the Company") has become the third "new EV forces" in China with monthly sales volume (MSV) exceeding 30,000 units. The Company's sales in Aug. 2024 hit another record high, with deliveries increasing by 113.6% yoy to 30,305 units, which is the fourth consecutive month that the Company's vehicle sales have hit a record high. Meanwhile, on 26 Aug. 2024, the Company's shareholder, chairperson of the board and chief executive officer, Mr. Zhu Jiangming and the shareholders of the Company, Mr. Fu Liquan and his wife announced their intention to increase their shareholdings in the H-shares of the Company within 6 months from the date of the announcement, for an amount of up to RMB300 mn or HKD equivalent.
We expect Leapmotor's monthly sales volume to reach around 28,000 units in 3Q2024. We continue to believe that Leapmotor's sales will remain strong in the coming months. Leapmotor's new smart six-seater high-cost SUV C16 was a hot seller as soon as it was launched, with more than 8,000 units delivered in Aug. 2024. We expect the sales of C16 will continue to grow. Meanwhile, Leapmotor C10 and T03 are already on sale in the European market, and more vehicles will be shipped to the European market in the coming months. Leapmotor C10 and T03 models will also be launched simultaneously in the Asia-Pacific market. The Company's sales in 3Q2024 are expected to continue to grow.
In 4Q2024, the Company's new B-series model, B10 will be unveiled at the Paris Motor Show, which will target young consumers around the world and is expected to become the next hit model. We expect the upcoming new model to contribute significant sales to the Company together with the C-series model next year. Strong sales are expected to help Leapmotor maintain its leading position among China's "new EV forces".
Considering Leapmmotor's strong vehicle sales fundamentals, paired with major shareholders increasing their H-share holdings, we maintain the Company's "Buy" investment rating with a TP of HK$36.00 per share, corresponding to 1.8x 2024 PS.
Risks: 1) Industry competition may exceed expectations; 2) sales of new vehicle models and overseas sales may fall short of expectations.