Ideal Auto's Q4 net profit surged 20 times year-on-year! Up 8% before the market

Net profit for Q4 recorded RMB 5.75 billion, up 2068.2% from the same period last year and 104.5% from Q3 2023. Q4 net profit was due in part to the impact of non-cash income tax revenue of RMB 1.99 billion recorded as a result of reversing certain deferred income tax asset impairment provisions.

Q4 net profit attributable to shareholders was RMB 5.658 billion, and ADS per diluted share was RMB 532.

The company expects vehicle deliveries in the first quarter of 2024 to be between 100,000 and 103,000 vehicles, an increase of 90.2% to 95.9% over the first quarter of 2023. In addition, the company also expects total revenue for the first quarter of 2024 to RMB 31.25 billion to RMB 32.19 billion (between US$4.40 billion and US$4.53 billion), an increase of 66.3% to 71.3% over the first quarter of 2023.

Li Xiang, CEO of Ideal, said that in 2023, when competition is fierce in the NEV market, Ideal Auto achieved excellent results with the three models in the Ideal L series. The annual delivery volume increased by 182.2% year-on-year to 376,030 vehicles, making it the sales leader for NEVs over 300,000 yuan in the Chinese market.

In addition, Ideal Auto's free cash flow for Q4 2023 was RMB 14.64 billion, an increase of 349.4% over RMB 3.26 billion in the same period last year. Li Tie, CFO of Ideal Auto added,

“... Ideal Auto's annual revenue increased 173.5% year over year to RMB 123.85 billion. With the growth of business scale and optimization of production, supply and marketing collaboration, gross margin reached 23.5% in the fourth quarter and 22.2% for the whole year. Furthermore, 2023 was also the first year the company turned a loss into profit and achieved a healthy profit, with a net profit of RMB 11.81 billion for the whole year. By the end of 2023, the company's cash reserves had increased to RMB 103.67 billion. In 2024, healthy profitability and financial strength will support Ideal Auto to deepen R&D, expand its business scale, and continue to lead the rapid transformation of China's NEV market.”

Driven by impressive earnings reports, Ideal Auto (LI.O) US stocks rose 8% in the premarket. It is worth mentioning that on the eve of the release of the earnings report, the stock's call options were the first to send a positive signal, and Ideal Auto (02015.HK)'s stock call options trading volume in Hong Kong reached the highest level since November 2022.