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Research Alert: CFRA Maintains Strong Sell Opinion On Shares On Li Auto Inc.
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Research Alert: CFRA Maintains Strong Sell Opinion On Shares On Li Auto Inc.
Mar 14, 2025 8:39 AM

11:25 AM EDT, 03/14/2025 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

Li Auto ( LI ) reported Q4 2024 revenue of CNY44B (+6% Y/Y), supported by vehicle deliveries of 158,696 units (+20%), though average selling prices declined due to product mix and pricing adjustments. GAAP net income fell 39% to CNY3.5B, while non-GAAP net income decreased 12% to CNY4B, with diluted EPS of CNY3.31 (-38%) and non-GAAP EPS of CNY3.79 (-10%). Despite competitive pressures leading to a 300-bp gross margin contraction to 20%, the company improved its operating margin to 8% through a 22% reduction in operating expenses. However, we are concerned about the company's declining free cash flow, which fell 59% to CNY6B, potentially constraining future growth investments. Management's Q1 2025 guidance suggesting Y/Y revenue decline, combined with ongoing margin pressures and intensifying competition in China's EV market, points to challenging near-term prospects for the company.

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