Zhejiang Leapmotor Technology (9863) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 rose 52.2% year-over-year to RMB8,845.4 million, driven by strong vehicle deliveries and new model launches, with total deliveries reaching 86,696 units, up 94.8% year-over-year.

• Gross margin improved to 1.1% from -5.9% year-over-year, with Q2 2024 gross margin at 2.8% and June close to 5%.

• Net loss attributable to equity holders was RMB2,211.7 million, slightly narrowing from the prior year, with adjusted net loss (non-IFRS) at RMB2,016.2 million.

• R&D expenses increased 48.4% to RMB1,221.3 million, reflecting investment in new models and intelligent driving technology.

• Record monthly deliveries in June and July, with July orders exceeding 28,000 and deliveries reaching 22,993 units.

Financial highlights

• H1 2024 revenue: RMB8,845.4 million, up 52.2% year-over-year.

• Gross profit turned positive at RMB100.2 million, compared to a loss of RMB341.8 million a year ago.

• Gross margin: 1.1% for H1, Q2: 2.8%, June: close to 5%.

• Net loss: RMB2,211.7 million, improved from RMB2,276.1 million.

• Net cash from operating activities: RMB267.6 million, up from RMB151.7 million.

Outlook and guidance

• Targeting 250,000 total vehicle sales and 5%+ gross margin for 2024, with Q3 expected to set a new high.

• Overseas expansion to Europe with C10 and T03 models starting September 2024, aiming for 200 outlets by year-end.

• R&D expenses expected to grow 50% year-over-year, supporting seven new models in the pipeline.

• Next year’s margin target is 10%, with a mid-term goal of 15%.

• Further improvement in gross profit and cash flow anticipated in the second half of 2024.