On April 22nd, Red Star Capital Bureau announced that Ideal Automobile (02015. HK/LI. US) has reduced prices across its entire lineup. Among them, Ideal MEGA reduced its price by 30000 yuan; The price of all models in the Ideal L7, Ideal L8, and Ideal L9 series has been reduced by 18000-2000 yuan.
Affected by this news, the Hong Kong stock of Ideal Automobile fell more than 9% at one point, closing down 8.14%. Since March 1st, the Ideal Automobile Hong Kong stock has fallen 45%.
At the same time as the price reduction, Ideal Automobile will provide cash feedback to owners of the 2024 Ideal L7, Ideal L8, Ideal L9, and Ideal MEGA who have already picked up their cars.
The 2024 Ideal L Series was released on March 1st of this year and delivery began on March 3rd. At the same time, the 2023 Ideal L Series is still on sale. In March of this year, the sales of Ideal Automobile were 28984 units, and the specific model sales were not disclosed. According to third-party platform data, the sales of Ideal MEGA in March were 3229 vehicles.
Based on this calculation, in extreme cases, Ideal Automobile needs to return cash of 560 million to 612 million yuan to its old owners.
The sales of Ideal Automobile in the first quarter were 80400 units, a year-on-year increase of 52.9%. This sales volume is closest to 86500 units in the second quarter of 2023, with a difference of 7%. In the second quarter of 2023, the net profit of Ideal Automobile was 2.31 billion yuan.
If the net profit of Ideal Automobile in the first quarter of this year is the same as that in the second quarter of 2023, which is about 2.24 billion yuan, the return of cash to old car owners will not cause the company to incur losses.
In 2023, Ideal Automobile's revenue was 123.85 billion yuan, a year-on-year increase of 173.5%; The net profit reached 11.81 billion yuan, achieving a full year profit for the first time; The gross profit margin is 22.2%, and the free cash flow is 44.19 billion yuan; As of the end of 2023, the company's cash reserves reached 103.67 billion yuan.
Assuming that the selling price of the Ideal L series in 2023 is reduced by 18000-2000 yuan today, can Ideal Automobile still make a profit?
In 2023, Ideal Automobile delivered a total of 376030 new cars, a year-on-year increase of 182.2%, and the sales of specific models were not disclosed. According to third-party platform data, the sales of Ideal L9 in 2023 were 114377 units, Ideal L8 was 117990 units, and Ideal L7 was 134089 units, totaling 366456 units.
Based on this calculation, in extreme cases, the net profit of Ideal Automobile will decrease by 6.596 billion to 7329 billion yuan, a decrease of 55.85% -62%, leaving 4.481 billion to 5214 billion yuan, still profitable.