Abstract
Li Auto Inc. will report first-quarter 2026 results Pre-Market on May 28, 2026; investors will look for confirmation of revenue near RMB 21.57 billion and clarity on margins and earnings after a difficult fourth quarter and a product-cycle reset.
Market Forecast
Consensus compiled from recent estimates points to first-quarter revenue of RMB 21.57 billion, implying a year-over-year decline of 13.99%, with EPS estimated at -RMB 1.19 (down about 357% year over year) and EBIT at approximately -RMB 2.72 billion; the company’s prior update framed revenue at RMB 20.40 billion to RMB 21.60 billion, down around 19% at the midpoint. Forecasts for gross profit margin and net profit margin are not available; the focus remains on whether revenue and unit deliveries track guidance and whether cost-control measures stabilize profitability. The main business—vehicle sales—remains the core revenue engine, with management updates and recent delivery prints indicating the quarter’s trajectory will be influenced by the pace of new-model ramp and the mix of trims into late March and April. The most promising near-term catalyst is the refreshed flagship Li L9 Livis, expected to support order intake and ASPs in the second quarter, tightening the gap to guidance; deliveries of 41,053 vehicles in March and 34,085 in April indicate improving monthly cadence into quarter-end and early Q2.
Last Quarter Review
In the fourth quarter of 2025, Li Auto Inc. reported revenue of RMB 28.78 billion, down 35.01% year over year, a gross profit margin of 17.83%, GAAP net profit attributable to shareholders of RMB 6.52 million with a net margin of 0.02%, and adjusted EPS of RMB 0.01, down 99.70% year over year. A key financial highlight was a sequential swing back to a small profit, with quarter-on-quarter net profit growth of about 101.04%, reflecting improved cost discipline even as volumes softened. Vehicle sales generated RMB 27.25 billion in the quarter while other sales and services contributed RMB 1.52 billion; the top line’s 35.01% year-over-year decline reflected lower deliveries and a less favorable product mix that also pressured margin.
Current Quarter Outlook
Main business: Vehicle sales and revenue trajectory
The central question for this quarter is whether vehicle revenue holds near the company’s guidance range and aligns with the RMB 21.57 billion consensus. March deliveries of 41,053 and April deliveries of 34,085 provide a useful run-rate context heading into the final month of the quarter, suggesting a rebound from the low base set in late 2025. Order conversion from refreshed nameplates, marketing cadence, and production normalization are likely to determine how close realized revenue lands to the top end of the guidance range. Pricing discipline and product mix will be closely watched after the fourth-quarter gross margin of 17.83% reflected a less favorable configuration. The immediate target for margin stabilization is to prevent further erosion as promotional intensity and launch costs pass through; progress should be visible through ASP trends and discounting levels that accompany the L9 Livis rollout. Any signal that mix is shifting toward higher-margin trims would ease pressure on unit economics and support a faster path back to positive operating leverage. Operating expense control remains a parallel focus. Consensus expects EBIT of around -RMB 2.72 billion for Q1, pointing to a temporary step-up in expenses associated with new-model marketing and technology investments. Management commentary around the pace of R&D and sales expense growth versus revenue should offer a read-through on how quickly EBIT can inflect as new products scale.
Most promising business: New flagship ramp and ecosystem monetization
The all-new Li L9 Livis, officially unveiled in mid-May with deliveries beginning shortly thereafter, is positioned to bolster the near-term order book and ASPs as the refreshed flagship re-engages family and premium buyers. The pricing of the model and trim configuration strategy are likely to support mix improvement as the model ramps, helping to offset earlier margin pressure seen in the fourth quarter. Early reception to the model’s technology suite and comfort upgrades will be a leading indicator for second-quarter revenue momentum. Beyond hardware, ancillary revenue lines—classified as other sales and services—contributed RMB 1.52 billion last quarter. As Li Auto integrates more software, connectivity, and service offerings, these streams have potential to diversify revenue and improve monetization per vehicle. While explicit year-over-year growth rates for these non-vehicle lines are not disclosed, any commentary on subscription uptake, service attach rates, or charging network utilization would be constructive for medium-term visibility. Integration of new compute architectures is another supportive element. Recent disclosures that Li Auto is utilizing advanced data-movement and integration automation for in-vehicle AI compute underline the company’s intent to enhance user experience and differentiate through software. Commercial impact from these investments tends to lag the engineering timeline; nevertheless, demonstration of robust in-car intelligence can improve perceived value and pricing power over subsequent quarters.
Stock-price swing factors this quarter: Guidance credibility, margin stabilization, and capital allocation
The first swing factor is guidance credibility—whether revenue results and the new order pipeline track the RMB 20.40–21.60 billion range previously communicated. Positive confirmation would signal that the company is navigating the product-cycle reset effectively, especially after a 35.01% year-over-year revenue decline in the fourth quarter. A result in line with or above the midpoint could support a tightening of full-year expectations and encourage the view that the worst of the volume trough is behind. Margin stabilization is the second swing factor. The fourth-quarter gross margin of 17.83% will serve as a baseline. Investors will parse any update on discounting, input costs, and manufacturing yields to gauge whether margins can stabilize before improving with scaled deliveries of refreshed models. Even modest sequential progress on gross margin, combined with expense restraint, would alleviate concerns embedded in the -RMB 2.72 billion EBIT consensus and the -RMB 1.19 EPS estimate. Capital allocation is the third swing factor. Approval of a US$1.00 billion share buyback program signals management’s readiness to deploy balance sheet flexibility to support shareholder value. Execution cadence—how much is bought back and when—can influence sentiment around downside support for the stock. Additionally, the notice to holders of the 0.25% convertible senior notes due 2028 regarding put rights introduces a timing consideration for cash outlay; management’s commentary on liquidity, together with any update on repurchases, will be important for equity holders.
Analyst Opinions
Across directional views published between January 1, 2026 and May 21, 2026, the ratio of bullish to bearish opinions skews positive: three Buy ratings versus one Sell, with several Neutral updates. The majority stance is bullish, emphasizing a constructive setup into the first-quarter print. CLSA reiterated a Buy with a target price of HK$140.00, citing confidence that refreshed products can re-accelerate orders and support a revenue recovery as 2026 progresses. Their positive view hinges on mix upgrades from the L9 Livis and a gradual rebound in deliveries that, if sustained, should reduce the gap to prior run-rate benchmarks. In their framework, confirmation that revenue lands near the high end of the guidance range would be a strong validation of the cycle turn. UBS maintained a Buy and a target price of HK$117.00, highlighting the company’s balance sheet flexibility and scope for incremental margin improvement as promotional activity normalizes post-launch. UBS emphasizes that gross margin stabilization, even before a full recovery, would be enough to improve operating leverage given the cost base already absorbed for current product programs. They look for sequential progress on profitability metrics rather than a single-quarter step-change. Huatai Securities reaffirmed a Buy with a target price of HK$78.42, focusing on the deliveries trajectory and the pricing strategy of refreshed models. Their positive stance assumes that the March and April delivery prints are leading indicators for improving revenue conversion, with the L9 Livis launch acting as a catalyst for second-quarter momentum. They also point to the potential benefits of capital allocation—specifically the authorized share repurchase program—as supportive to per-share metrics if executed against a depressed equity base. Complementing the Buy-side views, additional broker updates shifted toward Neutral rather than negative, as evidenced by BNP Paribas upgrading to Neutral from Underperform and others adjusting targets while emphasizing wait-and-see stances. The preponderance of bullish opinions centers on the argument that the fourth quarter marked a trough in revenue and profitability. From that base, a combination of guided revenue, steady deliveries, launch-driven mix uplift, and expense discipline can methodically close the gap to breakeven EPS later in the year. In terms of what these bullish analysts will monitor on May 28, the priority list is clear: realized revenue versus the RMB 20.40–21.60 billion guide and the RMB 21.57 billion consensus; commentary on gross margin drivers relative to the 17.83% fourth-quarter level; clarity on cost trajectory underpinning the consensus EBIT of -RMB 2.72 billion; and evidence that new-model reception is translating into stable order intake. If the company confirms that deliveries and revenue are tracking toward the high end of the range and provides a path to firmer margins in the second quarter, the bullish case contends that the stock’s risk-reward can reset higher. Overall, the majority view expects a challenging but manageable quarter: revenue down year over year per guidance and consensus, earnings under pressure given launch and marketing costs, but with identifiable levers to improve from the fourth-quarter trough. Analysts constructive on the name believe that delivery cadence and product cycle execution, together with measured capital deployment via buybacks, can anchor a gradual inflection in earnings quality through mid-2026.
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