According to a research report released by CICC, the ideal car-W (02015) "outperform industry" rating is maintained, and the 2024 / 25 non-profit forecast is reduced by 25% to 101 / 17.3 billion yuan based on the current order trend and the adjustment of the release rhythm of pure electric models. Taking into account the company's organizational and product launch-related adjustments, cut the target price by 44% to HK $130. The company's 1Q24 performance is basically in line with market expectations

EventBestblockchaingamingplatformThe company's 1Q24 revenue is 256.Bestblockchaingamingplatform.30 billion yuan, month-on-month-38.6% Nonmuri GAAP net profit

1.28 billion yuan, month-on-month-72.2%. Due to the comprehensive influence of overdraft and seasonality at the end of last year, the company's delivery volume decreased month-on-month in the first quarter, and some expenses were relatively rigid, which led to a greater decline in net profit.

The main points of the report are as follows:

1Q gross profit margin performance is sound, part of the price adjustment has been reflected.

1Q24 delivered 80400 vehicles, with a month-on-month ratio of-39.0%. Considering the impact of product structure optimization and price adjustment of 24 new cars, the corresponding bicycle income was 318827 yuan, compared with + 2207 yuan. 1Q car sales gross profit margin of 19.3%, month-on-month-3.4ppt, excluding the one-time impact of 4Q23 premium, the month-on-month decline is even smaller, mainly reflecting the impact of April pricing adjustment; looking forward to 2Q, the bank believes that the price adjustment has already responded, and the increase in L6 share may bring some pressure. On the expense side, the company 1Q R & D expenses are RMB 3.05 billion, which is mainly affected by the expansion of personnel and salary compared with the same period last year, which is mainly affected by the expansion of personnel and salary, and the decrease is mainly due to the timing of new car research and development. 1Q sales fee is 2.98 billion yuan, compared with the same / month ratio + 81.0% RMB8.9%, respectively, which is mainly affected by the expansion of personnel, salary and sales network, and the decrease is mainly due to the decrease of vehicle delivery.

1-2Q operation is in the adjustment period, price adjustment led to the pick-up of orders, L6 began to contribute increment.

1Q's operating loss was 590 million yuan, interest income and investment income totaled 1.07 billion yuan, driving the net profit of GAAP to 590 million yuan, the net profit of Non-GAAP to 1.28 billion yuan, and the corresponding bicycle Non-GAAP.

The net profit is 15875 yuan. After the official launch of the L6 model in April, the company achieved a cumulative order of more than 41000 vehicles during the first sale period from April 18 to 5.5, a strong performance. So far, the company has formed the layout of five MEGA,L6789 models, and the bank expects the company to further improve the competitiveness of the model by reducing the price of the previous all-line models by 18000 to 30, 000 yuan. at present, the company's insurance data has risen to about 8000 vehicles per week, and the company has guided 2Q to deliver 105000 to 110000 vehicles. The bank expects the delivery volume to increase rapidly quarter by quarter.

Adjust the release rhythm of pure electric product line and refocus on efficiency and user demand.

Prior to this, the company reviewed many aspects such as the release and pricing of new models in the first half of the year. In this performance meeting, the company further emphasized organizational adjustment and added quality operation departments to more rapidly improve implementation efficiency and reduce operational work. In addition, the company plans to release follow-up pure electric SUV models one after another from 1H25 to consolidate the foundation of overcharging network construction and channel optimization, to build more than 2000 overcharging stations by the end of this year, and to optimize store booths, sales energy and other resources, in order to better and faster release the sales momentum of pure electric vehicles.

Risks: pure electric models are not as expected; smart driving is not as expected; market competition is intensified.