Key Takeaways:
- CMBI cut Li Auto's price target to HKD62 from HKD70
- Net profit forecasts for FY2026 slashed by 85%
- Brokerage maintained Hold rating and 490,000 vehicle sales forecast
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CMBI cuts Li Auto target to HKD62 on record quarterly net loss
CMBI lowered its price target on Li Auto to HKD62 from HKD70, citing the company's largest quarterly net loss since its 2020 initial public offering.
The brokerage expects Li Auto to continue posting losses in the second quarter, with a maturing product portfolio and changes in model mix limiting delivery upside for FY2027-28, CMBI said in a note. It maintained a Hold rating on the stock.
CMBI slashed its net profit forecasts for FY2026 and FY2027 by 85% and 21%, respectively. The brokerage kept its FY2026 sales estimate unchanged at 490,000 vehicles. The US-listed shares target price was cut to USD16 from USD18, in line with the Hong Kong share reduction.
Li Auto shares traded at about HKD57.80 on Friday, gaining 0.3%, implying roughly 7% upside to the new target. Short selling accounted for 35.9% of the day's trading volume, according to exchange data. The stock has fallen 29% over the past year, underperforming the Hang Seng Index's 12% gain.
Separately, Bank of America Securities lowered its Li Auto US price target to USD18, reiterating a Neutral rating. The dual downgrades from major brokerages signal mounting pressure on Li Auto's profitability as competition in China's premium EV segment intensifies. Rivals including Nio and Xpeng have also faced margin compression as a price war has eroded industry profitability.
The company's largest quarterly loss since listing highlights the challenge of maintaining margins while scaling production across an expanding model lineup. Li Auto's shift toward lower-priced models and increased spending on autonomous driving technology have weighed on earnings. The 85% cut to FY2026 net profit forecasts implies the brokerage sees limited near-term catalysts for a recovery.
Investors will watch second-quarter delivery numbers and any pricing strategy adjustments for signs of a turnaround. Li Auto's ability to stabilize margins while defending market share against both legacy automakers and newer entrants will determine whether the stock can reverse its 12-month decline.
This article is for informational purposes only and does not constitute investment advice.
[1] ＜Research＞CMBI Cuts LI AUTO-W (02015.HK) TP to HKD62, Maintains Hold[2] Optimus Finance reports consolidated net profit of ₹975.84 lakh in FY26 - scanx.trade[3] SEL FY26 net loss widens to ₹16,787 lakh on liquidity stress - scanx.trade[4] CWD Limited FY26 net profit surges 391% to ₹12 crore - scanx.trade
