LI - Li Auto: Value Investment Buried In The Chaos

2024-02-07 13:22:23 ET

Summary

• Despite being overshadowed by Tesla and BYD, Li Auto emerges as a formidable player in China's electric vehicle market, strategically targeting both hybrid and premium segments.
• Li Auto showcases impressive operational performance, surpassing revenue projections and demonstrating robust bottom-line results.
• Li Auto's recent stellar performance includes substantial free cash flow generation, outpacing major competitors like Tesla and BYD.
• Regardless of China's macroeconomic challenges, Li Auto presents a promising long-term investment prospect, as government efforts to stabilize the stock market are ongoing, suggesting there is still room for upside growth.

Investment Thesis

Although often overlooked in comparison to Tesla, Inc. ( TSLA ) and BYD Company Limited ( OTCPK:BYDDF ), Li Auto Inc. ( LI ) has emerged as one of the leading competitors in the Chinese landscape of battery-electric vehicles (BEVs) and, most recently, all-electric vehicles (EVs). Li Auto's strategy is quite different from its competitors, offering hybrid engines in China to reduce range anxiety along with the ability to travel long distances across China....

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