Robert Way
At the beginning of the year, I was part of a conference with a focus on the automotive industry. During this conference, a lot of industry experts gave their opinion about the transition to EV, the auto industry in general and
Li Auto: Consistent Performer And Undervalued
Summary
- Li Auto, a Beijing-based company founded in 2015 by Xiang Li, focuses on REEV SUVs, offering extended range and leading sales in China.
- Xiang Li's unique approach contrasts with NIO's, opting for SUV models after the LSEV plan failed due to regulatory issues.
- Li Auto's financials show strong revenue growth, solid margins, and liquidity, positioning it well for future expansion and benefiting from China's stimulus.
- Despite risks like the Chinese market and VIE structure, Li Auto's valuation through discounted cash flows and multiples suggests it could be a good investment.
Graduated from one of the top business schools in Europe with an MSc in Finance and passed CFA level 1 in May of 2024. I focus on stocks with a strong competitive advantage and a strong management team. I am currently revising my own portfolio and own 9 stocks as well as some ETFs. After revision I aim to have between 10 to 15 stocks and a few broad ETFs.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of LI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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