BOCOM International released a research report stating that it maintains the "Buy" rating of Ideal Automo-W (02015), adjusted for revenue and profits, based on the 2024 P/P ratio of 1luxurycasino25freespins.5 times, lowered its target price to HK$120.34. Since the beginning of this year, Ideal's share price has adjusted back to more than 50%, which the bank believes is enough to offset some of the negative impact of fundamentals. Ideal's current price-to-sales ratio in 2024 is 1 times (1.1-1.3 times that of peers), while Ideal's average monthly delivery in the second quarter is about 30,000 units, cash is 98.9 billion yuan, and gross profit margin is ~20%, which is still better than that of peers. The bank believes investors may start to rethink the possibility of more positive signals in the coming months, such as orders improving on a monthly basis.
The main points of the report are as followsluxurycasino25freespins：
Sales and profit forecasts were lowered to reflect lower-than-expected sales and changes in product mix.
Ideal Car's first-quarter results fell short of expectations, while management announced that the release of the pure tram model would be postponed until next year. Therefore, the bank lowered its sales forecast for 2024 and 2025 by 15% and 35% respectively, mainly considering the postponement of the launch of pure electric vehicles and the weak recovery in demand for L7/L8/L9 modified models due to intensified market competition., and the dilution effect caused by the increase in L6 sales. The bank's latest sales forecast for 2024 is 484,000 units, slightly lower than the company's guidance of 560,000 - 640,000 units. In addition, due to the relatively high proportion of L6 and the slow recovery of sales of higher-priced L8/L9 models, it may have a negative impact on gross profit margin. But on the other hand, ideal organizational structure adjustment and resource optimization can save some expenses. The bank expects net profit in 2024 to be 8.3 billion yuan (RMB, the same below).
A rebound in sales is the key to turning around the decline.
Although Ideal has not adjusted its full-year sales guidance, the bank believes that buyers '2024 sales forecasts are lower than the company's. The bank believes that the performance of the L6 after its release is an indicator for the market and the company to reassess the turning point in car sales, and is also the key to the ideal car to regain its profitability and investor confidence. In particular, the postponement of the release of the pure tram model until next year will make the momentum of the L-series order improvement. It becomes even more important. Judging from the orders the bank learned from channels, L6 currently accounts for about 50%. Orders for L8 and L9 are relatively small, and weekly orders from late April to mid-May are 7,000 - 8,000 units, which is relatively stable. The sustainability of orders and the rebound in L8/L9 order volume will help support the stock price rebound. Ideal will launch a number of time-limited car purchase rights for L7/L8/L9 in May, which is expected to stimulate sales of high-priced models.