Li Auto Shares Fall After Recent Run-Up, MEGA Miss
Chinese EV maker launches first full-electric model, MEGA, at a slightly higher price than analysts expected
Li Auto’s LI -5.10%decrease; red down pointing triangle shares dropped sharply on Monday, with analysts attributing the selloff to profit-taking after big gains last week and some consumer disappointment with the Chinese electric-vehicle maker’s newest model.
Shares were 13% lower at 156.20 Hong Kong dollars (US$19.95) by midday, on track for their largest one-day percentage drop since October 2022. The loss, the biggest among Hang Seng Index constituents, trimmed year-to-date gains to 6.1%.
The decline came after Li Auto, a plug-in hybrid electric-vehicle specialist, on Friday launched its first full-electric model, MEGA, at 559,800 yuan (US$77,785), slightly higher than analysts expected.
“Investors’ feedback on the MEGA launch event are polarized in terms of pricing and interior design,” CCB International 601939 -0.43%decrease; red down pointing triangle equity analyst Ke Qu said.
Hanyang Wang, a senior analyst at 86 Research, said that order numbers over the weekend are likely to be weaker than expected.
Li Auto also said late Friday that it delivered 20,251 vehicles in February, up 22% from a year earlier but far below January numbers. Meanwhile, its Huawei-backed competitor Seres, which competes in the SUV market in the same hybrid space, outsold Li Auto for the second straight month.
Li Auto has guided for sales of 50,000 vehicles in March, and investors are waiting on MEGA’s orders to see whether the goal is in reach.
Some of the share-price drop was to be expected, analysts said, after a run-up in shares last week. On Tuesday, after Li Auto provided a solid plan for 2024 in its fourth-quarter earnings report and call, shares rose 25%, their most in nearly two years.
Until Monday’s drop, shares had gained for nine consecutive trading sessions, adding 44%.