Zhejiang Leapmotor Technology (9863) Q3 2024 earnings summary

Executive summary

• Q3 2024 deliveries reached 86,165 units, up 61.7% quarter-on-quarter and 94.4% year-on-year, with record monthly sales and a strong product mix shift toward higher-value models.

• Revenue for Q3 was CNY 9.86 billion, up 83.9% quarter-on-quarter and 74.3% year-on-year, with gross profit margin improving to 8.1% from 2.8% in Q2.

• Net loss attributable to equity holders narrowed to CNY 690 million, down from CNY 1.2 billion in Q2 and CNY 990 million in Q3 2023, driven by sales growth, improved margins, and cost control.

• Operating cash flow was positive at CNY 1.96 billion, with free cash flow at CNY 1.32 billion and cash on hand at CNY 18.7 billion.

• Overseas expansion accelerated, with 339 distributor stores in Europe and plans to reach over 500 global stores, supported by a partnership with Stellantis.

Financial highlights

• Q3 revenue: CNY 9.86 billion (+83.9% Q/Q, +74.3% Y/Y).

• Gross profit margin: 8.1% in Q3, up from 2.8% in Q2 and 1.2% in Q3 2023.

• Net loss: CNY 690 million, significantly narrowed from previous quarters.

• Operating cash flow: CNY 1.96 billion; free cash flow: CNY 1.32 billion.

• Cash and equivalents stood at CNY 18.7 billion as of September 30, 2024.

Outlook and guidance

• Q4 sales expected to be higher than Q3, with strong order backlog and continued rapid growth in sales and financial performance.

• 2024 sales target: 500,000 units, with monthly sales aiming for 40,000 units; annual target of 250,000 units expected to be exceeded.

• GP margin target for 2024: above 10%, up from 5% in 2023.

• B-series launch in 2024, starting with B10, expected to drive growth, with three models debuting in China and Europe.