Today, after announcing its third quarter results, the stock price of Ideal Auto W (02015. HK) plummeted significantly, with a drop of nearly 7% during the session. More noteworthy is that some institutions have raised their target prices.
As of press release, Ideal Automobile fell 6.07% to HKD 145.4.
In fact, the performance of Ideal Automobile in the third quarter was not poor. According to the third quarter report, the revenue reached 34.68 billion yuan, a year-on-year increase of 271.2%, exceeding the market expectation of 33.641 billion yuan; It is expected that the revenue in the fourth quarter will be between 38.46 billion yuan and 39.38 billion yuan.
Note: The performance of Ideal Automobile in the third quarter
During the same period, the gross profit of Ideal Automobile was 7.64 billion yuan (approximately 1.05 billion US dollars), an increase of 546.7% from 180 million yuan in the third quarter of 2022 and 22.6% from 6.24 billion yuan in the second quarter of 2023.
The institution stated that the performance in the third quarter exceeded market expectations
Some institutions have reported exceeding market expectations for this performance. According to a report from Bank of America Securities, Ideal Automobile's revenue in the third quarter was 34.7 billion yuan, an increase of 271% year-on-year and 21% month on month. The gross profit margin is 22%, a year-on-year increase of 9.3 percentage points and a month on month increase of 0.2 percentage points, in line with the bank's expectations. The low base for the same period last year was mainly due to losses related to inventory provisions and commitments to purchase certain components. The net profit in the third quarter was 2.8 billion yuan, an increase of 23% compared to a loss of 1.6 billion yuan in the same period last year, which is better than the bank's expectations.
Bank of America Securities pointed out that Ideal Automobile will strive to balance sales and profitability when formulating sales strategies, with the goal of maintaining a gross profit margin of over 20% every quarter in the future. Due to its performance in the third quarter, the bank has raised its profit forecast for the company for the three-year period from this year to 2025 by 7%, lowered it by 9%, and lowered it by 3%, respectively. The target price has been raised from HKD 238 to HKD 242, and the "buy" rating has been maintained to reflect the strong performance of the new model product line.