Affordable Growth. Analyze the stocks which are showing good growth, decent profitability and health and are not overvalued from a fundamental perspective.


LI AUTO INC - ADR

Nasdaq / Consumer Discretionary / Automobiles

Fundamental Rating

6

We assign a fundamental rating of 6 out of 10 to LI. LI was compared to 38 industry peers in the Automobiles industry. LI has an average financial health and profitability rating. An interesting combination arises when we look at growth and value: LI is growing strongly while it also seems undervalued. With these ratings, LI could be worth investigating further for value and growth investing!.



6

1. Profitability

1.1 Basic Checks

LI had positive earnings in the past year.
In the past year LI had a positive cash flow from operations.
LI had negative earnings in 4 of the past 5 years.
LI had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

Looking at the Return On Assets, with a value of 8.16%, LI belongs to the top of the industry, outperforming 86.49% of the companies in the same industry.
Looking at the Return On Equity, with a value of 19.46%, LI belongs to the top of the industry, outperforming 83.78% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 6.24%, LI belongs to the top of the industry, outperforming 81.08% of the companies in the same industry.
Industry RankSector Rank
ROA 8.16%
ROE 19.46%
ROIC 6.24%
ROA(3y)1.77%
ROA(5y)N/A
ROE(3y)4.73%
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A

1.3 Margins

LI has a Profit Margin of 9.45%. This is amongst the best in the industry. LI outperforms 86.49% of its industry peers.
LI's Operating Margin of 5.98% is fine compared to the rest of the industry. LI outperforms 72.97% of its industry peers.
LI has a Gross Margin of 22.20%. This is amongst the best in the industry. LI outperforms 83.78% of its industry peers.
LI's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 5.98%
PM (TTM) 9.45%
GM 22.2%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y10.66%
GM growth 5YN/A

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5

2. Health

2.1 Basic Checks

LI has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for LI has been increased compared to 1 year ago.
LI has a worse debt/assets ratio than last year.

2.2 Solvency

LI has an Altman-Z score of 2.53. This is not the best score and indicates that LI is in the grey zone with still only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.53, LI is doing good in the industry, outperforming 75.68% of the companies in the same industry.
LI has a debt to FCF ratio of 0.58. This is a very positive value and a sign of high solvency as it would only need 0.58 years to pay back of all of its debts.
LI has a Debt to FCF ratio of 0.58. This is amongst the best in the industry. LI outperforms 100.00% of its industry peers.
LI has a Debt/Equity ratio of 0.41. This is a healthy value indicating a solid balance between debt and equity.
LI has a Debt to Equity ratio (0.41) which is in line with its industry peers.
Industry RankSector Rank
Debt/Equity 0.41
Debt/FCF 0.58
Altman-Z 2.53
ROIC/WACC0.56
WACC11.17%

2.3 Liquidity

A Current Ratio of 1.57 indicates that LI should not have too much problems paying its short term obligations.
With a Current ratio value of 1.57, LI perfoms like the industry average, outperforming 54.05% of the companies in the same industry.
A Quick Ratio of 1.48 indicates that LI should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.48, LI is doing good in the industry, outperforming 67.57% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.57
Quick Ratio 1.48

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7

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 1189.57% over the past year.
LI shows a strong growth in Revenue. In the last year, the Revenue has grown by 173.48%.
The Revenue has been growing by 135.72% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)1189.57%
EPS 3YN/A
EPS 5YN/A
EPS growth Q2Q173.22%
Revenue 1Y (TTM)173.48%
Revenue growth 3Y135.72%
Revenue growth 5YN/A
Revenue growth Q2Q36.66%

3.2 Future

The Earnings Per Share is expected to grow by 7.16% on average over the next years.
Based on estimates for the next years, LI will show a very strong growth in Revenue. The Revenue will grow by 25.70% on average per year.
EPS Next Y38.17%
EPS Next 2Y44.39%
EPS Next 3Y38.11%
EPS Next 5Y7.16%
Revenue Next Year62.66%
Revenue Next 2Y49.2%
Revenue Next 3Y37.82%
Revenue Next 5Y25.7%

3.3 Evolution

Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.

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9

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 11.61 indicates a reasonable valuation of LI.
Based on the Price/Earnings ratio, LI is valued a bit cheaper than the industry average as 78.38% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 28.67. LI is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 6.36, the valuation of LI can be described as very cheap.
LI's Price/Forward Earnings ratio is rather cheap when compared to the industry. LI is cheaper than 94.59% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 20.15. LI is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 11.61
Fwd PE 6.36

4.2 Price Multiples

LI's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. LI is cheaper than 97.30% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, LI is valued cheaper than 100.00% of the companies in the same industry.
Industry RankSector Rank
P/FCF 3.53
EV/EBITDA 4.71

4.3 Compensation for Growth

LI's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of LI may justify a higher PE ratio.
LI's earnings are expected to grow with 38.11% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.3
PEG (5Y)N/A
EPS Next 2Y44.39%
EPS Next 3Y38.11%

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0

5. Dividend

5.1 Amount

No dividends for LI!.
Industry RankSector Rank
Dividend Yield N/A

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