Ideal Automobile has delivered its "most ideal financial report".
On February 26th, Ideal Automobile (LI. NASDAQ/2015. HK) disclosed its financial reports for the fourth quarter and full year of 2023. Thanks to the rapid growth of business scale, the firm implementation of cost reduction in supply, and the continuous improvement of operating efficiency, the company's financial situation has been continuously improving. Ideal Automobile delivered 376030 vehicles throughout the year, becoming the first Chinese new force automobile enterprise to pass the annual delivery milestone of 300000 vehicles; Realized a revenue of 123.85 billion yuan, becoming the first new force automotive company in China to break through 100 billion yuan in annual revenue; Realized a net profit of 11.81 billion yuan, becoming the third new energy vehicle company in the world to make a full year profit, following Tesla and BYD.
Looking at the automotive market in 2023, the smoke of gunpowder is spreading, competition is intensifying, industrial transformation, price wars, and demand overdrafts are all driving the accelerated transformation of the automotive industry. In the increasingly differentiated market landscape, facing increasingly fierce competition, choosing between sales and profits has become a helpless choice for most car companies. There are very few who can achieve both, but Ideal Automobile is such an exception. In 2023, Ideal Automobile not only increased its profit margin but also achieved sales growth, successfully achieving both goals.
After 8 years, Ideal Automobile achieved a revenue of 100 billion and a profit of 10 billion, successfully joining the "100 billion club". It is worth noting that Ideal Automobile achieved this achievement much shorter than industry giants Tesla (15 years) and BYD (21 years), demonstrating its competitiveness and development potential in the industry.
123.85 billion yuan: "The most ideal financial report"
Ideal Automobile has delivered its "most ideal financial report" in history: its revenue, profit, and delivery volume in the fourth quarter of 2023 all reached new quarterly highs; In 2023, the annual revenue reached 123.85 billion yuan, ushering in the first fully profitable year. Not only did it become the first new Chinese car making force to cross the life and death line and break the curse of losses, but it also demonstrated its strong growth momentum and leading position in the industry with its strength.
Specifically, in the fourth quarter of 2023, Ideal Automobile delivered a total of 131805 new cars, a year-on-year increase of 184.6%; The revenue for the quarter was 41.73 billion yuan, a year-on-year increase of 136.4%, and the net profit for the fourth quarter was 5.75 billion yuan. Revenue, profit, and delivery all reached new quarterly highs. This is the fifth consecutive quarter since the fourth quarter of 2022 when Ideal Automobile achieved profitability.
At the same time, Ideal Automobile has also ushered in its first fully profitable year, topping out among a group of new car making forces.
In 2023, Ideal Automobile delivered 376030 vehicles throughout the year, a year-on-year increase of 182.2%; Realized a revenue of 123.85 billion yuan, a year-on-year increase of 173.5%, becoming the first new force automotive company in China to exceed 100 billion yuan in annual revenue.
More noteworthy is that the profit performance of Ideal Automobile is also outstanding.
In 2023, the gross profit margin of Ideal Automobile was 22.2%, maintaining a healthy level of gross profit. Li Xiang stated that a gross profit margin of over 20% is necessary for smart electric vehicle companies to maintain long-term research and development investment. In addition, this data also exceeded Tesla's gross profit margin of 18.2% announced in its 2023 financial report.
In terms of net profit, the net profit of Ideal Automobile in 2023 was 11.81 billion yuan, achieving comprehensive profitability since delivery, breaking the long-standing loss trap of new energy vehicle manufacturers, and becoming the third new energy vehicle company in the world to make a full year profit after Tesla and BYD. This achievement even exceeds the 2023 net profit data released by traditional car companies such as Great Wall Motors and BAIC Group.
In terms of cash flow, the free cash flow in 2023 was 44.19 billion yuan, a year-on-year increase of 1861.8%. As of the end of 2023, Ideal Automobile held a cash reserve of up to 103.67 billion yuan.
With abundant funds on hand and a healthy business model, Ideal Automobile continues to increase its investment in research and development. The research and development expenses in the fourth quarter of 2023 were 3.49 billion yuan, a year-on-year increase of 68.6%. The annual R&D expenses reached a record high of 10.59 billion yuan, with a year-on-year increase of 56.1%.
46 months: "Ideal Speed"
What supports the impressive financial report data of Ideal Automobile is its soaring delivery volume.
In the current camp of new forces in Chinese car manufacturing, Ideal Automobile's market performance has been far ahead and its advantage is obvious - with a cumulative sales volume of 376030 units in 2023, it has successfully won the sales crown of China's new forces in 2023, and is also one of the few new forces in car manufacturing that has achieved its annual sales target in 2023. At the same time, with a sales target achievement rate of 125%, it firmly ranks first among Chinese car companies.
"All 2023 targets have been achieved: 376000 (annual delivery volume), 50000 (monthly delivery volume), 20000 (ideal L7 single vehicle monthly delivery volume), and 300 (super charging station). This is the first time in the history of Chinese new power car companies that they have crossed the annual delivery threshold of 300000 vehicles." Li Xiang, CEO of Ideal Automobile, said, "In 2024, we will challenge higher targets: 800000, 100000, 30000, and 2000." That is to say, in 2024, Ideal Automobile will challenge annual sales of 800000 vehicles. " Target monthly sales of 100000 vehicles.
In November 2019, the first vehicle was taken offline; In October 2021, the 100000th vehicle was taken offline; In August 2022, the 200000 th vehicle will be taken offline; In June 2023, the 400000th vehicle was taken offline; In September 2023, the 500000 th vehicle was taken offline... Ideal Automobile achieved the milestone of the 500000 th mass-produced vehicle being taken offline in just 46 months, demonstrating remarkable "ideal speed".
Entering 2024, Ideal Automobile continues to maintain strong momentum. In January, a total of 31165 new cars were delivered, a year-on-year increase of 105.8%.
The reason why the sales of Ideal Automobile can continue to rise is due to its strong product strength and clear strategic positioning, providing users with a high-quality experience.
In terms of strategic positioning, Ideal Automobile focuses on the new energy vehicle market of over 200000 yuan and is committed to manufacturing the best family cars in China. Each product can accurately focus on the needs of household users, combined with the geographical characteristics of China, choose extended range routes to enter, while providing users with an electric vehicle experience, it also solves the range anxiety of users for long-distance travel.
In terms of product strength, Ideal Automobile takes user value as the innovation trade-off and high-frequency needs of household users as the value judgment, without stacking functions. From the Ideal ONE to the Ideal L series, product features are designed around the actual needs of home users, ensuring that function development meets the high-frequency usage scenarios of home users. Maximizing the comfort and convenience of family cars has ushered in the era of "refrigerator, color TV, and sofa" in Chinese automobiles.
The constantly rising sales have given Ideal Automobile more room for imagination, even the courage to point fingers at BBA. Li Xiang once publicly stated, "We are confident in challenging the sales of Mercedes Benz, BMW, and Audi in China in 2024, and will strive to become the best-selling luxury brand in the Chinese market in 2024."
800000 vehicles: a new journey for Ideal Cars
The current ideal car, with a large number of cars delivered for sale and solid cash flow as its foundation, has become the top new force in the automotive industry. But if you want to maintain a leading position in the long term, solidify your position as the leader of new forces, continuously introduce competitive new models and technological innovations, to meet the continuous demand of consumers for high-quality and high-performance electric vehicles, it is the ideal choice for cars.
In 2023, Ideal Automobile achieved its best financial performance in history, mainly due to its significant growth scale, in-depth research and development investment, and continuously improving operational efficiency. These achievements have also laid a solid foundation for Ideal Automobile to enter a new stage of richer product matrix and more diverse market demand in 2024. "In 2024, the growth of the positive cycle business will solidify our healthy profitability, strong hematopoietic ability, and solid financial foundation, continuing to drive in-depth research and development of products, platforms, and systems." Looking ahead to the first quarter of 2024, Li Xiang predicts that the delivery volume of vehicles will be 100000 to 103000, a year-on-year increase of 90.2% to 95.9%; The total revenue was 31.25 billion yuan (4.40 billion US dollars) to 32.19 billion yuan (4.53 billion US dollars), a year-on-year increase of 66.3% to 71.3%.
2024 will be a big year for Ideal Automobile products. In March, the MPV Ideal MEGA will be launched and delivered, and the Ideal L7, Ideal L8, and Ideal L9 will also welcome the 2024 model year. "By the end of the year, Ideal Automobile's product line will include 4 extended range and 4 pure electric models, totaling 8 models, forming a highly competitive product portfolio that fully meets the diversified needs of household users." Li Xiang emphasized that these new products will be "extremely powerful". In addition, Ideal Automobile will significantly increase investment in research and development, continuously improving its technological capabilities in the fields of intelligent driving, intelligent space, and intelligent electric vehicles. The sales and service network will also be fully upgraded, and it is expected that by the end of this year, the retail center target will increase to 800, and the after-sales service center and authorized sheet metal spray center are expected to exceed 500.
In order to support pure electric vehicle models, Ideal Automobile has opened over 340 Ideal Supercharging stations on the charging network. In 2024, we will accelerate the layout speed of overcharged networks in national highways and cities, with the goal of launching a total of 2000 charging stations by the end of this year.
In terms of intelligence, Ideal Automobile will also focus on building intelligent driving research and development capabilities. It is expected that by the second quarter of this year, all city NOAs without graphics will be fully opened nationwide, further enhancing the ability of city NOAs. The scope of use will no longer be limited by the number of cities, and it will be upgraded to all AD Max vehicles through OTA.
Supported by richer products, stronger product capabilities, and a more efficient production, supply, and marketing system, Ideal Automobile is expected to deliver over 50000 vehicles in March this year and over 70000 vehicles in June. In 2024, Ideal Automobile will challenge the new goal of delivering 800000 vehicles annually and achieve the goal of being the top selling luxury car brand in the Chinese market.
Looking towards the future, the ambition of Ideal Automobile is not small, but ideals are still necessary. What if they are realized?
This article is for reference only and does not serve as an investment basis