Li Auto Q1 Earnings Report

Li Auto (LI US, 2015 HK) reported Q1 financial results after the Hong Kong close. According to management, Q1 is “typically a seasonally slow period for auto sales”.

• Revenue increased +1.1% to RMB 25.9B ($3.6B) from RMB 25.63B, versus expectations of RMB 25.12B
• Adjusted Net Income declined -20.5% to RMB 1B ($139.8mm) from RMB 1.28B, versus expectations of RMB 1.96B
• Adjusted EPS decreased to RMB 0.96 from RMB 1.21, versus expectations of RMB 0.76
• Total deliveries for the first quarter of 2025 were 92,864 vehicles, representing a 15.5% year-over-year increase.
• Q2 forecast:
  • Deliveries of vehicles are expected to be between 123,000 and 128,000, representing a year-over-year increase of 13.3% to 17.9%.
  • Total revenues are expected to be between RMB32.5 billion (US$4.5 billion) and RMB33.8 billion (US$4.7 billion), representing a 2.5% to 6.7% year-over-year increase.

Key News

Asian equities cheered the Court of International Trade’s decision that President Trump’s use of the International Emergency Economic Powers Act of 1977 was not legal. Japan, Hong Kong, and South Korea outperformed, Taiwan and the Philippines underperformed, and Indonesia was closed for Ascension Day, a major Christian holiday commemorating Jesus Christ’s ascension into heaven.

The Trump Administration is appealing the decision and could implement tariffs under Section 301 of the Trade Act of 1974, as he did in his first term. It does highlight the ability to challenge DC in the courts, as we saw with TikTok. We’ll enjoy the moment while it lasts, though one would hope 1600 Pennsylvania Avenue notices the strong market response.

The Financial Times, which clearly receives Trump “leaks” over the Wall Street Journal, reported “the US Department of Commerce had told so-called electronic design automation groups – which include Cadence, Synopsys and Siemens Eda – to stop supplying their technology to China” according to “several people familiar with the move”. Cadence fell by 10.67%, destroying $9.411B of investor capital based on their market cap decline, while Synopsys fell by 9.64%, destroying $7.381B of investor capital.

The Administration’s foreign student visa ban has evolved into a China student visa ban based on comments from Secretary of State Rubio. All pressure points are being applied to China trade negotiations, though President Trump’s June 14th and President Xi’s June 15 birthdays are coming, which many have speculated would result in a meeting.

Hong Kong growth stocks, other than electric vehicles and hybrids, which continue to face competition concerns, responded with a rip in response led by Meituan, which gained +6.62% on strong liquor sales at the start of the 618 e-commerce event, Tencent, which gained +0.89%, and Alibaba, which gained +2.07%. Meanwhile, Xiaomi fell -0.10%, CATL fell -1.09%, and BYD fell -0.25%. JD.com gained +4.19% on a partnership with popular app provider Xiao Hong Shu, commonly known as Little Red Book.

Zhongan Online P&C Insurance +31.56% bringing recent gains to over +70% following Hong Kong passing a stablecoin Bill as the company is “Hong Kong’s first digital bank to provide reserve-banking service for stablecoin issuers” according to Bloomberg. As one of their largest ten shareholders, we’ll take it! Again, this proves how hard it is to pick the winners.

Healthcare and the Apple ecosystem stocks Sunny Optical and AAC Technologies ripped higher on the tariff news by +4.54% and +3.11%, respectively, while Wuxi Biologics gained +10.04%, and CSPC Pharmaceuticals +11.73% after strong Q1 results.

XPeng bucked the downward trend for EV stocks, gaining +5.17% after releasing a new autonomous driving feature.

The tariff news did something the government has not been able to accomplish: raise the Mainland markets! Technology and growth stocks led the way higher versus value plays, as banks slipped. The Hang Seng Index is well above its Liberation Day Gap, Shanghai is just above it, Hang Seng Tech, and Shenzhen closed right at it. Hopefully, a little positive momentum allows for another push higher.

A Mainland media source reported that fifty cities announced home purchase subsidies, including Hefei, Taizhou, Jiangsu, Foshan, Lanzhou, and Wuhan. What is interesting is that several cities are providing subsidies for families with two or three children. In Wuhan, families with two children receive a discount of RMB 60,000 and those with three children a discount of RMB 120,000. An incentive to have more kids while addressing the housing crisis. Two birds, one stone! Interesting, right?!

Random thought: If the US government implemented tariffs due to the national crisis caused by the trade deficit, shouldn’t there be a similar response to the US government's budget deficit?

Last Night's Performance

Country / Index	Ticker	1-Day Change
China (Hong Kong)	HSI Index	1.4%
Hang Seng Tech	HSTECH Index	2.5%
Hong Kong Turnover	HKTurn Index	25.5%
Hong Kong Short Sale Turnover	HKSST Index	17%
Short Turnover as a % of Hong Kong Turnover	N/A	15.1%
Southbound Stock Connect Net Buy/Sell (US $ Millions)	N/A	25.1
China (Shanghai)	SHCOMP Index	0.7%
China (Shenzhen)	SZCOMP Index	1.4%
China (STAR Board)	Star50 Index	1.6%
Mainland Turnover	.chturn Index	17.3%
Nouthbound Stock Connect Net Buy/Sell (US $ Millions)	N/A	Not Available
Jing Daily China Global Luxury Index	CHINALUX Index	0.8%
Japan	NKY Index	1.9%
India	SENSEX Index	0.4%
Indonesia	JCI Index	-0.3%
Malaysia	FBMKLCI Index	-0.3%
Pakistan	KSE100 Index	0.6%
Philippines	PCOMP Index	-0.2%
South Korea	KOSPI Index	1.9%
Taiwan	TWSE Index	0%
Thailand	SET Index	0.3%
Singapore	STI Index	0.1%
Australia	AS51 Index	0.2%
Vietnam	VNINDEX Index	0%

Indicator	A	Mainland China
Today's Volume % of 1-Year Average	121	95
Advancing Stocks	375	4165
Declining Stocks	107	846
Outperforming Factors	Buybacks, Liquidity, Growth	Liquidity, Growth, Momentum
Underperforming Factors	Low Volatility, Dividend Yield, Value	Low Volatility, Value, Dividend Yield
Top Sectors	Healthcare, Discretionary, Industrials	Tech, Healthcare, Communication
Bottom Sectors	Staples	Utilities
Top Subsectors	Pharmaceuticals, National Defense, Consumer Durables	Software, Biotech, Motorcycle,
Bottom Subsectors	Consumer Service, Household/Personal Products, Electrical Equipment	Office Supplies, Daily Chemical, Precious Metals
Southbound Connect Buys	Meituan (Large), ZA Online (Moderate), CSCPC Pharmaceuticals, Pop Mart (Small)
Southbound Connect Sells	SMIC, Xiaomi, XPeng (Moderate), Alibaba, Tencent (Small)

MSCI China All Shares Index	# of Stocks	Average 1-Day Change (%)
Hong Kong Listed	151	1.54
Communication Services	9	1.16
Consumer Discretionary	28	2.73
Consumer Staples	13	-0.05
Energy	7	0.08
Financials	23	0.51
Health Care	13	5.1
Industrials	20	1.46
Information Technology	10	0.83
Materials	10	0.19
Real Estate	6	1.17
Utilities	12	0.11
Mainland China Listed	404	0.66
Communication Services	6	0.7
Consumer Discretionary	31	0.58
Consumer Staples	24	0.02
Energy	13	0
Financials	64	0.3
Health Care	31	1.38
Industrials	64	0.46
Information Technology	91	2.26
Materials	58	0.42
Real Estate	6	0.64
Utilities	16	-0.44

US & Hong Kong Dually Listed	Ticker	1-Day Change (%)
Tencent HK	700 HK Equity	0.9
Alibaba HK	9988 HK Equity	2.1
JD.com HK	9618 HK Equity	4.2
NetEase HK	9999 HK Equity	1.9
Yum China HK	9987 HK Equity	1.8
Baozun HK	9991 HK Equity	-1.1
Baidu HK	9888 HK Equity	2.7
Autohome HK	2518 HK Equity	0
Bilibili HK	9626 HK Equity	0.9
Trip.com HK	9961 HK Equity	3.5
EDU HK	9901 HK Equity	4.3
Xpeng HK	9868 HK Equity	5.2
Weibo HK	9898 HK Equity	0.8
Li Auto HK	2015 HK Equity	-0.6
Nio Auto HK	9866 HK Equity	3.7
Zhihu HK	2390 HK Equity	-2.5
KE HK	2423 HK Equity	1.3
Tencent Music Entertainment HK	1698 HK Equity	1
Meituan HK	3690 HK Equity	6.6

Hong Kong's Most Heavily Traded by Value	1-Day Change (%)
MEITUAN-CLASS B	6.6
TENCENT HOLDINGS LTD	0.9
ALIBABA GROUP HOLDING LTD	2.1
XIAOMI CORP-CLASS B	0.4
BYD CO LTD-H	-2.7
HONG KONG EXCHANGES & CLEAR	-1.8
ZHONGAN ONLINE P&C INSURAN-H	31.6
KUAISHOU TECHNOLOGY	5.9
JD.COM INC-CLASS A	4.2
CSPC PHARMACEUTICAL GROUP LT	11.7

Shanghai and Shenzhen's Most Heavily Traded by Value	1-Day Change (%)
BYD CO LTD -A	-2.6
RONGFA NUCLEAR EQUIPMENT C-A	10
EOPTOLINK TECHNOLOGY INC L-A	6.2
CONTEMPORARY AMPEREX TECHN-A	-0.2
LUXSHARE PRECISION INDUSTR-A	3.4
EAST MONEY INFORMATION CO-A	1.7
ZHONGJI INNOLIGHT CO LTD-A	2.5
FUJIAN SNOWMAN GROUP CO-A	10
VICTORY GIANT TECHNOLOGY -A	4.2
LAKALA PAYMENT CO LTD-A	20

Last Night's Exchange Rates, Prices, & Yields

• CNY per USD 7.18 versus 7.19 yesterday
• CNY per EUR 8.11 versus 8.14 yesterday
• Yield on 10-Year Government Bond 1.69% versus 1.68% yesterday
• Yield on 10-Year China Development Bank Bond 1.73% versus 1.71% yesterday
• Copper Price -0.08%
• Steel Price +0.24%