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The Li Xiang One PHEV
Thanks to Li Auto Inc.
Li Auto,
like its electric vehicle counterparts
NIO
and
Tesla,
had a very strong end to the year. The Chinese EV sector remains on fire until 2021.
The Chinese manufacturer of the Li ONE SUV delivered 6,126 vehicles in December. According to the company, it increased by 4,646 in November and increased by 530% compared to December 2019.
It can be a bit difficult to get a consensus delivery number for Li Auto (ticker: LI) and other Chinese EV manufacturers. Most analysts are based in Asia and it is difficult to reach a consensus. Tesla (TSLA), for example, delivered more than 180,000 vehicles in the fourth quarter, which was better than the approximately 176,000 analysts had predicted.
Yet the Li number is very strong, even without a real consensus for analysts to compare it. The company said during its conference call in the third quarter that it is expected to deliver 11,000 to 12,000 vehicles in the fourth quarter. The company eventually delivered 14,464 in the fourth quarter and easily beat its own initial projections.
NIO (NIO) delivered more than 7,000 vehicles in December. Combined with the Tesla and Li results, it appears that demand for Chinese EV remains very healthy.
XPeng
(XPEV), the other US-listed Chinese EV producer, has not yet released December deliveries.
It can sometimes be difficult to get the stock price to respond to even good news. Li inventory fell after reporting the delivery in November. Li also sold more stock to raise cash around the time the deliveries were announced in November.
EV shares are definitely in a bull market. Tesla rose by about 740% in 2020 and is now the world’s most valuable car company with a wide margin. Li stock closed at $ 28.83 in 2020, significantly higher than the $ 11.50 stock market.
The gains make Li and the Chinese EV sector as a whole expensive. Barron’s recently wrote that Chinese EV shares were too expensive for us. The article appears in mid-December and the Chinese EV shares are on average trading over where they did at the time.
Analysts mostly disagree Barron’s. More than 60% of analysts rate the three Chinese EV shares – NIO, Li and XPeng – Buy. The average buy rating ratio for shares in
Dow Jones Industrial Average
is about 57%.
For Li, about 64% of the analysts the company rates are buying shares. The average price target for analysts is around $ 37 per share.
Monday should be an interesting day. Investors have to deal with the recent price of Model Y in China. A Model Y is priced below a NIO EC6 and right around the price of a Li ONE.
This may worry investors, but the delivery numbers look good.
Write to All root at [email protected]