Ideal Motors (NASDAQ:LI, 02015.HK) delivered a financial report that exceeded market expectations.

On November 29, Ideal Auto announced its third-quarter 2021 financial report, showing that Ideal Auto’s total revenue in the third quarter was 7.78 billion yuan, an increase of 209.7% year-on-year, month-on-month An increase of 54.3%, exceeding market expectations of 7.3 billion yuan; while revenue growth, Ideal Auto’s net loss also sharply narrowed to 21.5 million yuan, a year-on-year decrease of 79.9% and a month-on-month decrease of 90.9%. Ideal ONE’s delivery volume was 25,116 vehicles, a year-on-year increase of 190%.

As of the close of US stocks on November 29, Ideal Motors rose 6.42% to US$34.48.

Gross profit margin increased to 23.3%

” With the successful launch of the 2021 Ideal ONE in May, we achieved strong results in the third quarter. “Li Tie, Chief Financial Officer of Ideal Auto, said.

In the third quarter, the gross profit margin of ideal cars was 23.3%, and the gross profit margin of vehicles was 21.1%. According to Li Tie, “Further promoted by the sales of new energy vehicle points this quarter, the gross profit margin of ideal cars reached 23.3%.” Ideally disclosed in the earnings call that through the sale of new energy points for 2020, ideal cars will earn approximately 2%. 100 million yuan in revenue.

Shen Yanan, co-founder and president of Ideal Auto, said that the increase in gross profit is mainly due to the increase in the average selling price of the 2021 Ideal ONE. In addition, Ideal also adopts cost control measures. A more powerful measure.

In the earnings conference call, Ideal Auto CEO Li Xiang especially emphasized Ideal Auto’s strict control of gross profit margin.

“If a company’s gross profit margin is in the single digits, it can only maintain product research and development and cannot invest in a deeper technical level.” He said that gross profit margin Whether a company can continue to invest heavily in basic research and development is of vital importance. The company must carefully control the gross profit margin, which is neither too high nor too low, in order to benefit the long-term development of the company.

In terms of expenses, Ideal Auto’s R&D expenses in the third quarter were 889 million yuan, a year-on-year increase of 165.6%. Sales, general and administrative expenses are 120 million yuan, a year-on-year increase of 198.5%.

Ideally, this is mainly due to the increase in marketing and promotion activities in the third quarter, the continuous expansion of the sales network, and the increase in employee salaries. In the future, efforts will be made to reduce the proportion of sales, general and management expenses to less than 10%.

Supply chain problems will continue at least until the first quarter of next year

In terms of car sales, in the third quarter of 2021, the ideal ONE delivery volume is 25,116 vehicles, a year-on-year increase of 190%. This figure is higher than its third-quarter delivery forecast lowered due to the lack of cores, and is in line with the earliest delivery guidance.

Li Xiang said, “We will continue to increase investment in research and development to promote the parallel development of range-extended electric vehicles and pure electric vehicles, as well as the rapid development of smart cockpit and smart driving technology. Progress. At the same time, we will further increase production capacity through the construction of a manufacturing base in Beijing, and continue to expand our sales and service network to prepare for the continued growth of our business.”

In terms of productivity, the ideal car is still in the process of climbing.

In October 2021, construction of the ideal manufacturing base in Beijing officially started, and it is planned to be put into operation in 2023. According to reports, in 2023, the ideal standard annual production capacity can reach 500,000 vehicles. If a two-shift work system is arranged, an annual production capacity of 700,000 vehicles can be achieved.

Introduce the ideal aspect. At present, the number of orders in hand is considerable, and the orders in October exceeded 14,000 units. Currently, its factory is sufficient to support a monthly order volume of 14,000. By next year, its monthly production capacity can exceed 15,000.

According to Shen Yanan, the current ideal vehicle delivery is still affected by supply chain issues and cannot reach the monthly delivery of 14,000 vehicles.

Previously, Ideal once withdrew from the delivery plan of “deliver the vehicle first and supplement the radar later” due to the shortage of millimeter wave radar. It is reported that the current supply problem of its millimeter-wave radar has been solved, but the supply problem of ESP (Electronic Body Stability System) still exists.

Ideally, it is expected that supply chain problems will continue at least until the first quarter of next year, and stillTo face the shortage of parts for a long period of time, the ideal aspect is actively communicating with Bosch to solve the supply problem.

In addition, in terms of products, the ideal second car based on the X platform will be released in the second quarter of next year, and delivery will begin in the third quarter, ending its “one “Cars hit the world” situation.

Previously, Ideal had announced the launch of pure electric models in 2023. However, regarding the development progress of pure electric vehicles that have attracted much attention from the market, the ideal car has not yet been disclosed. The ideal brand’s pure electric models are “unexpected”, and the pace seems to be slower on the battlefield of such fierce competition.

For the next fourth quarter, Ideal Auto predicts in its financial report that the delivery volume of vehicles in the fourth quarter will be 30,000-32,000, a year-on-year increase of 107.4%-121.2 %; Expected revenue is 8.82 billion yuan-94.1 billion yuan, a year-on-year increase of 112.7%-126.9%.