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The Li Xiang One PHEV
Courtesy of Li Auto Inc.
Li Auto,
like its peers in electric vehicles
NIO
and
Tesla,
had a very strong finish to the year. The Chinese EV sector remains on fire and rolls out in 2021.
The Chinese maker of the Li ONE SUV delivered 6,126 vehicles in December. That is up from 4,646 in November and is up about 530% compared to December 2019, according to the company.
It can be a bit difficult to get a consensus number for Li Auto (ticker: LI) and other Chinese EV manufacturers. Most of the analysts are based in Asia and it is difficult to reach a consensus. For example, Tesla (TSLA) delivered more than 180,000 vehicles in the fourth quarter, which was better than roughly 176,000 analysts predicted.
Still, the Li number is very strong even without a true analyst consensus for comparison. The company said during its third-quarter conference call that it expected to deliver 11,000 to 12,000 vehicles in the fourth quarter. The company delivered 14,464 results in the fourth quarter, easily exceeding its own initial expectations.
NIO (NIO) delivered more than 7,000 vehicles in December. Combined with the results of Tesla and Li, it appears that Chinese demand for electric vehicles remains very healthy.
XPeng
(XPEV), the other US listed Chinese EV producer, has not yet released any December deliveries.
It can be difficult at times to get the stock price to respond to even good news. Li stock fell after reporting deliveries in November. Li also sold more shares to raise money around the time the deliveries were announced in November.
EV stocks are definitely in a bull market. Tesla was up about 740% in 2020 and is now by a wide margin the world’s most valuable automotive company. Li shares closed 2020 at $ 28.83, up significantly from its July IPO price of $ 11.50.
Profits make Li, and the Chinese EV industry as a whole, expensive. Barron’s recently wrote that Chinese EV stocks were too expensive for us. That article came out in mid-December, and Chinese EV stocks are trading on average where they did then.
Analysts largely disagree Barron’s. More than 60% of analysts rate the three Chinese EV stocks – NIO, Li and XPeng – Buy. The average buying ratio for stocks in the
Dow Jones Industrial Average
is about 57%.
For Li, about 64% of the analysts reviewing the company’s stock buy. The average price target for analysts is about $ 37 per share.
Monday should be an interesting day. Investors should consider Tesla’s recent Model Y pricing in China. A Model Y is priced below a NIO EC6 and right around the price of a Li ONE.
That may be a concern for investors, but the delivery numbers look good.
Write to Al Root at [email protected]