Li Auto Inc. (NASDAQ:LI) stock fell Wednesday after the Chinese electric vehicle maker reported mixed second-quarter results and issued a weak revenue outlook.
Revenue Beats Estimates Despite Annual Decline
Revenue fell 15.1% year over year to 25.7 billion Chinese yuan ($3.78 billion). Still, it topped the analyst estimate of $3.70 billion. Revenue increased 11.7% from the previous quarter.
Li Auto reported an adjusted loss of 1.49 yuan, or 22 cents, per American depositary share. Analysts expected a loss of 1 cent per share.
Vehicle sales declined 16.7% to $3.5 billion. Lower deliveries and a weaker product mix weighed on results. However, vehicle sales rose 11.8% sequentially as deliveries and average selling prices improved.
Li Auto delivered 98,330 vehicles, down from 111,074 a year earlier but up from 95,142 in the first quarter. Deliveries fell 11.5% year over year.
Margins Narrow As Costs Rise
Vehicle margin fell to 9.4% from 19.4% a year earlier, mainly because of a different product mix. Gross margin declined to 11% from 20.1%.
Adjusted operating loss totaled 2.1 billion yuan ($308.6 million). That compared with adjusted operating income of 1.2 billion yuan a year earlier.
Adjusted net loss was 1.5 billion yuan ($220.9 million), compared with adjusted net income of 1.5 billion yuan in the prior-year quarter.
Li Auto held $12.9 billion in cash as of June 30.
Operating cash flow totaled 15 million yuan ($2.2 million), compared with an outflow of 3 billion yuan a year earlier.
Free cash flow improved to negative 1.3 billion yuan ($191.7 million), compared with negative 3.8 billion yuan a year earlier and negative 7.4 billion yuan in the previous quarter.
Retail And Charging Networks Expand
Li Auto operated 495 retail stores across 160 cities as of June 30. It also had 536 service centers and authorized body and paint shops across 220 cities.
Its charging network included 4,097 supercharging stations and 22,593 charging stalls.
Executives See Product Refreshes Supporting Margins
Chairman and CEO Xiang Li said Li Auto remained China’s top-selling domestic auto brand in the market for new-energy vehicles priced above 200,000 yuan during the first half.
The company has completed upgrades to its Li L series and is refreshing its battery-electric vehicle lineup. Xiang expects the new Li L6 to strengthen Li Auto’s position in the SUV market priced between 200,000 yuan and 300,000 yuan.
Chief Financial Officer Tie Li said gross margin improved sequentially to 11%, helped by the new Li L9. He expects margins to expand during the second half as the product mix improves and refreshed models reach the market.
Third-Quarter Outlook Misses Estimates
Li Auto expects third-quarter revenue of 26.6 billion yuan to 28 billion yuan ($3.9 billion to $4.1 billion). That represents a year-over-year change ranging from a 2.8% decline to a 2.3% increase.
The forecast fell below the analyst estimate of $5.11 billion.
The company expects to deliver 95,000 to 100,000 vehicles, representing growth of 1.9% to 7.3%.
LI Stock Hits New 52-Week Low
LI Price Action: Li Auto shares fell 2.2% to $12 at the time of publication Wednesday. The stock touched a new 52-week low, according to Benzinga Pro.
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