理想汽車 (LI) 2024 Q1 法說會逐字稿

Hello, ladies and gentlemen. Thank you for standing by for Li Auto's First Quarter 2024 Earnings Conference Call. (Operator Instructions) Today's conference call is being recorded.

女士們、先生們，大家好。感謝您出席理想汽車 2024 年第一季財報電話會議。 （操作員指示）今天的電話會議正在錄音。

I will now turn the call over to your host, Ms. Janet Chang, Investor Relations Director of Li Auto. Please go ahead, Janet.

現在我將把電話轉給你們的主持人，理想汽車投資者關係總監張珍妮女士。請繼續，珍妮特。

Good evening, and good morning, everyone. Welcome to Li Auto's First Quarter 2024 Earnings Conference Call. The company's financial and operating results were published in our press release earlier today, and are posted on the company's IR website.

大家晚上好，早安。歡迎參加理想汽車 2024 年第一季財報電話會議。該公司的財務和經營業績已在今天稍早發布的新聞稿中發布，並發佈在該公司的投資者關係網站上。

On today's call, we will have our Chairman and CEO, Mr. Xiang Li; and our CFO, Mr. Johnny Tie Li, to begin with prepared remarks. Our President, Mr. Donghui Ma; and our Senior Vice President, Mr. James Liangjun Zou, will join for the Q&A discussion.

出席今天的電話會議的有我們的董事長兼執行長李翔先生；我們的財務長 Johnny Tie Li 先生首先發表準備好的演講。我們的總裁馬東輝先生；我們的高級副總裁鄒良軍先生將參加問答討論。

Before I continue, please be reminded that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties.

在我繼續之前，請注意，今天的討論將包含根據 1995 年美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述。

As such, the company's actual results may be materially different from the views expressed today. Further information regarding risks and uncertainties is included in certain company filings with the U.S. Securities and Exchange Commission and the Stock Exchange of Hong Kong Limited.

因此，公司的實際結果可能與今天表達的觀點有重大差異。有關風險和不確定性的更多資訊包含在某些公司向美國證券交易委員會和香港聯合交易所有限公司提交的文件中。

The company does not assume any obligation to update any forward-looking statements, except as required and applicable law. Please also note that Li Auto's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial matters. Please refer to Li Auto's disclosure documents on the IR section of our website, which contain a reconciliation of the unaudited non-GAAP measures to comparable GAAP measures.

除根據要求和適用法律外，本公司不承擔更新任何前瞻性聲明的義務。另請注意，理想汽車的獲利新聞稿和本次電話會議包括對未經審計的 GAAP 財務資訊以及未經審計的非 GAAP 財務事項的討論。請參閱理想汽車在我們網站的投資者關係部分的揭露文件，其中包含未經審計的非公認會計原則措施與可比較公認會計原則措施的調節表。

Our CEO will start his remarks in Chinese there will be English translation after he finishes all his remarks.

我們的執行長將以中文開始講話，在他完成所有講話後將有英文翻譯。

With that, I will now turn the call over to our CEO, Mr. Xiang Li. Please go ahead.

現在我將把電話轉給我們的執行長李翔先生。請繼續。

[Interpreted]

[解讀]

Now translating for Mr. Li. First, I'll begin with a review of Li Auto's first quarter performance. In the first quarter, we delivered over 80,400 vehicles, up 52.9% year-over-year.

現在為李先生做翻譯。首先，我先回顧一下理想汽車第一季的業績。一季度，我們交付汽車超過80,400輛，較去年同期成長52.9%。

According to China Automotive Technology and Research Center, the NEV market priced over RMB 200,000 grew by 24.8% year-over-year during the first quarter. While our growth rate far exceeds that of the market, making us the leader among all premium NEV brands.

根據中國汽車技術研究中心統計，第一季20萬元以上新能源汽車市場年增24.8%。而我們的成長遠超市場，在所有高端新能源汽車品牌中處於領先地位。

Driven by the vehicle delivery growth, our total revenue for the first quarter reached RMB 25.6 billion, a year-on-year increase of 36.4%. Our gross margin for the first quarter remained healthy at 20.6% despite the launch of Li MEGA, the changeover of the L Series and the following price adjustments.

在車輛交付成長的帶動下，第一季總收入達256億元，年增36.4%。儘管推出了Li MEGA、更換了L系列以及隨後的價格調整，我們第一季的毛利率仍保持在20.6%的健康水準。

In the long run, our robust balance sheet with cash reserves of over -- of nearly RMB 100 billion will continue to support us to focus on user value creation and firmly invest in R&D as we continue to offer products and services for families that exceed their expectations.

從長遠來看，我們穩健的資產負債表和超過近千億元的現金儲備將繼續支持我們專注於用戶價值創造，堅定地投入研發，繼續為超越家庭需求的家庭提供產品和服務。

Nevertheless, we have admittedly encountered multiple challenges since the start of the year from both internal operations and changes in the external environment. Our performance this quarter fell short of our expectations made at the beginning of this year.

但今年以來，我們也確實遇到了來自內部經營和外部環境變化的多重挑戰。我們本季的業績未達我們年初的預期。

In response, we immediately took action and swiftly implemented adjustments across our business including an organizational restructure and workflow optimization. We're confident that these initiatives will enhance our internal operating efficiency and improve the quality of our decision-making going forward, allowing us to focus more on creating and delivering user value.

對此，我們立即採取行動，迅速對業務進行了組織架構調整、工作流程優化等調整。我們相信，這些措施將提高我們的內部營運效率並提高我們未來決策的質量，使我們能夠更專注於創造和交付用戶價值。

Turning over to products. We released Li MEGA on March 1, our first HPC BEV model and a high-tech flagship MPV for large families, built on our latest 800-volt battery electric platform and equipped with Qilin 5C battery, Li Mega is one of the fastest charging mass-produced vehicle passenger vehicles in production today.

轉向產品。我們於3月1日發布了Li MEGA，這是我們的首款HPC BEV車型，也是一款針對大家庭的高科技旗艦MPV，基於我們最新的800伏電池電動平台構建，並配備了麒麟5C電池，Li Mega是最快的充電品質之一-目前正在生產的乘用車。

During China's Labor Day holiday, the average charging time for Li MEGA users at our supercharging station was only 12.8 minutes, significantly alleviating energy anxiety. On April 18, we launched Li L6, a five-seat premium family SUV that offers young families who are seeking family vehicles priced below RMB 300,000.

在勞動節假期期間，Li MEGA用戶在我們的超級充電站平均充電時間僅12.8分鐘，顯著緩解了能源焦慮。 4月18日，我們推出了一款五座豪華家庭SUV——力L6，主要針對追求30萬元以下家庭用車的年輕家庭。

Li L6 offers a spacious interior and superior configurations and can support a CLPC range of 1,390 kilometers. In terms of safety, Li L6 vehicle body is designed to meet the most stringent safety testing standards in the industry.

鋰L6擁有寬敞的內部空間和優越的配置，可支援1,390公里的CLPC續航里程。在安全性方面，Li L6車身設計符合業界最嚴格的安全偵測標準。

Combined with this ever-improving full scenario AEB systems that comes standard on the vehicle, Li L6 offers robust safety for families on the road.

結合車輛標配的不斷改進的全場景AEB系統，Li L6為家庭在道路上提供強大的安全保障。

With the official launch of Li MEGA and Li L6, as well as the 2024 model year, Li L7, L8 and L9, we now offer a product portfolio that caters to a wide range of family users at price points ranging from RMB 200,000 to RMB 600,000.

隨著麗MEGA和麗L6的正式上市，以及2024年款麗L7、L8和L9，我們現在提供了20萬元至人民幣價位的產品組合，以滿足廣泛的家庭用戶需求。

Facing challenges in the competitive market landscape in late April, we swiftly responded to evolving user needs with the induction of a new pricing scheme that received very positive feedback resulted in a substantial increase in store visits.

面對四月下旬競爭激烈的市場格局的挑戰，我們迅速響應不斷變化的用戶需求，推出了新的定價方案，收到了非常積極的反饋，導致商店客流量大幅增加。

During the late holiday, weekly order growth hit in an all-time high. In particular, Li L6 received over 41,000 orders within its initial launch sales period from April 18 to May 5. We're sparing no efficacy to ensure a robust supply and production ramp-up for Li L6 to drive a rapid increase in deliveries.

假期末，每週訂單成長創歷史新高。其中，鋰 L6 在 4 月 18 日至 5 月 5 日上市銷售期間，訂單量超過 41,000 份。

Along with the release of our new models, we're continuing to make improvements in our economics driving platform. In mid-May, we began releasing Li AD Pro 3.0 to all of our users with an upgrade to a large model based BEV architecture with improved functionality, including highway NOA with driver takeover mileage of over 1,000 kilometers.

隨著新車型的發布，我們將繼續改進我們的經濟驅動平台。 5月中旬，我們開始向所有用戶發布Li AD Pro 3.0，升級到基於大型車型的純電動架構，功能得到改進，包括駕駛員接管里程超過1000公里的高速公路NOA。

City LCC are capable of identifying traffic wise and real-time autonomously stop and go at intersections and automated parking that can manage complex parking spaces. We launched public beta testing for Li AD Max 3.0 in May where approximately 1,000 users tested our latest city NOA feature, which does not require high definition maps and covers all roads nationwide. We plan to deploy the city NOA in all AD Max vehicles throughout year and third quarter of this year after we complete the initial nationwide testing.

城市 LCC 能夠智慧識別交通狀況，並能夠在十字路口即時自動停車和行駛，以及能夠管理複雜停車位的自動停車。我們在 5 月啟動了 Li AD Max 3.0 的公測，大約有 1,000 名用戶測試了我們最新的城市 NOA 功能，不需要高清地圖，覆蓋全國所有道路。我們計劃在完成全國初步測試後，在全年和今年第三季在所有 AD Max 車輛中部署城市 NOA。

Looking at our charging network. We currently have 404 super charging stations in operation with 1,770 charging stalls. During the May Day holiday, we provided over 54,000 complementary charging sections and waived fee for users across our models. At the same time, we provided over 96,000 charging sessions to NAV users across the countries across different brands.

看看我們的充電網路。目前，我們擁有 404 個正在運作的超級充電站，1,770 個充電站。在五一假期期間，我們為各車型用戶提供了超過54,000個免費充電路段和免收費用。同時，我們為各國不同品牌的 NAV 用戶提供了超過 96,000 次充電會話。

We will continue to expand and accelerate investments in our supercharging network and aim to have over 10,000 charging stations, charging stalls in operation on highways and city in China by the end of this year, continually improving the ultrafast charging experience for all of our battery users.

我們將繼續擴大並加快超級充電網路的投資，目標是到今年年底在中國的高速公路和城市擁有超過10,000個充電站、充電攤位，不斷改善所有電池用戶的超快充電體驗。

With respect to our sales network, we have established a presence across all first-tier, new first-tier and second-tier cities as well as 89% of third-tier cities nationwide. This year, we'll steadily expand our reach into additional cities to boost the penetration rate of any needs in China.

銷售網路方面，我們已覆蓋全國所有一線、新一線、二線城市以及89%的三線城市。今年，我們將穩定拓展至更多城市，以提高中國任何需求的滲透率。

Moreover, our service network is also expanding very rapidly, ensuring high salt quality services to our users. As of April 30, 2024, we have 481 retail stores covering 144 cities as well as 361 service centers and Li Auto authorized body shops operating in 210 cities across the country.

而且，我們的服務網絡也在快速擴張，保證了為使用者提供高鹽品質的服務。截至2024年4月30日，我們擁有涵蓋144個城市的481家零售店，以及覆蓋全國210個城市的361家服務中心和理想汽車授權車身店。

Looking ahead to the second quarter, we expect vehicle deliveries to be between 105,000 and 110,000 driven by robust market demand and our new products and recovery and orders. By fine-tuning the pace of our operations and upgrading our matrix organization and confident that we will further enhance operating efficiency, increase user value and pursue healthy growth.

展望第二季度，在強勁的市場需求以及我們的新產品以及復甦和訂單的推動下，我們預計汽車交付量將在 105,000 至 110,000 輛之間。透過微調營運節奏、升級矩陣組織，我們有信心進一步提升營運效率，提升使用者價值，實現健康發展。

Next, I will turn it over to our CFO, Johnny.

接下來，我會將其交給我們的財務長約翰尼。

Hello, everyone. I will now walk you through some of our 2024 1st quarter financials. Due to time constraints, I will now address financial highlights here and encourage you to refer to our earnings press release for further details.

大家好。現在，我將向您介紹我們 2024 年第一季的一些財務數據。由於時間限制，我現在將在此討論財務要點，並鼓勵您參閱我們的收益新聞稿以了解更多詳細資訊。

Total revenues in the first quarter were RMB 25.6 billion or USD 3.6 billion, up 36.4% year-over-year and down 38.6% quarter-over-quarter. This includes RMB 24.3 billion or USD 3.4 billion from vehicle sales, up 32.3% year-over-year and down 39.9% quarter-over-quarter.

第一季總營收為256億元人民幣（36億美元），年增36.4%，季減38.6%。其中汽車銷售收入為243億元人民幣（34億美元），較去年同期成長32.3%，季減39.9%。

The year-over-year increase was mainly attributable to higher vehicle deliveries, partially offset by the lower average selling price due to the different product mix and pricing strategy change between the 2 quarters. The sequential decrease was mainly due to decreased vehicle deliveries, which were affected by seasonal factors related to Chinese year holiday and lower the expected order intake in March.

同比增長主要歸因於車輛交付量的增加，但部分被兩個季度之間不同的產品組合和定價策略變化導致的平均售價降低所抵消。環比下降的主要原因是受春節假期季節性因素影響，車輛交付量下降，並降低了3月的預期訂單量。

Cost of sales in the first quarter was RMB 20.3 billion or USD 2.8 billion, up 36.1% year-over-year and down 36.3% quarter-over-quarter. Gross profit in the first quarter was RMB 5.3 billion or USD 731.9 million, up 38% year-over-year and down 46% quarter-over-quarter. Vehicle margin in the first quarter was 19.3% versus 19.8% in the same period last year and 22.7% in the prior quarter.

第一季銷售成本為203億元人民幣（28億美元），較去年同期成長36.1%，季減36.3%。第一季毛利為53億元人民幣（7.319億美元），年增38%，季減46%。第一季汽車利潤率為 19.3%，去年同期為 19.8%，上一季為 22.7%。

The vehicle margin remained relatively stable year-over-year. The sequential decrease was mainly due to lower average selling price as a result of pricing strategy changes in the first quarter and true-up adjustments of warranty reserve in the prior quarter based on updated estimate of cost of future claims.

整車利潤率較去年同期保持相對穩定。環比下降的主要原因是第一季定價策略變化導致平均售價下降，以及上一季根據未來索賠成本的最新估計對保固準備金進行了調整。

Gross margin in the first quarter was 20.6% versus 20.4% in the same period last year and 23.5% in the prior quarter. Operating expenses in the first quarter were RMB 5.9 billion or USD 812.9 million, up 71.4% year-over-year and down 13.1% quarter-over-quarter.

第一季毛利率為20.6%，去年同期為20.4%，上一季毛利率為23.5%。第一季營運費用為59億元人民幣（8.129億美元），年增71.4%，季減13.1%。

R&D expenses in the first quarter were RMB 3 billion or USD 422.3 million, up 64.6% year-over-year and down 12.7% quarter-over-quarter. Year-over-year increase was primarily due to increased employee compensation as a result of growth in number of staff as well as increased expense to support the expanding product portfolio and technology.

第一季研發費用為30億元人民幣（4.223億美元），年增64.6%，季減12.7%。年比成長主要是由於員工人數增加導致員工薪酬增加以及支持不斷擴大的產品組合和技術的費用增加。

The sequential decrease was mainly in line with timing and progress of new vehicle programs. SG&A expenses in the first quarter were RMB 3 billion, or USD 412.4 million, up 81% year-over-year and down 8.9% quarter-over-quarter. The year-over-year increase was primarily due to increased employee compensation as a result of the growth in number of staff, as well as increased rental and other expenses associated with the expansion of sales and servicing network.

環比下降主要與新車專案的時間和進度一致。第一季的銷售管理及行政費用為 30 億元人民幣（4.124 億美元），較去年同期成長 81%，較上季下降 8.9%。年比成長主要是由於員工人數增加導致員工薪資增加，以及與銷售和服務網絡擴張相關的租金和其他費用增加。

The sequential decrease was mainly due to lower vehicle deliveries. Loss from operations in the first quarter was RMB 584.9 million or USD 81 million versus income from operations of RMB 405.2 million in the same period last year and RMB 3 billion in the prior quarter.

環比下降主要是由於車輛交付量下降。第一季營運虧損為人民幣 5.849 億元（約 8,100 萬美元），而去年同期營運收入為人民幣 4.052 億元，上一季營運收入為 30 億元。

Operating margin in the first quarter was negative 2.3% versus positive 2.2% in the same period last year, and positive 7.3% in the prior quarter. Net income in the first quarter was RMB 591.1 million or USD 81.9 million, down 36.7% year-over-year and 89.7% quarter-over-quarter.

第一季營業利益率為負 2.3%，去年同期為正 2.2%，上一季為正 7.3%。第一季淨利為5.911億元（8,190萬美元），年減36.7%，季減89.7%。

Diluted net earnings per ADS attributable to ordinary shares was RMB 0.56 or $0.08 in the first quarter versus RMB 0.89 in the same period last year and RMB 5.32 in the prior quarter.

第一季稀釋後歸屬於普通股的每股美國存託股淨利為人民幣 0.56 元或 0.08 美元，去年同期為人民幣 0.89 元，上一季為人民幣 5.32 元。

Turning to our balance sheet and cash flow. Our cash position remained strong and stood at RMB 98.9 billion or USD 13.7 billion as of March 31, 2024. Net cash used in operating activities in the first quarter was RMB 3.3 billion or USD 462.9 million, versus net cash provided by operating activities of RMB 7.8 billion in the same period last year and RMB 17.3 billion in the prior quarter.

轉向我們的資產負債表和現金流。截至2024 年3 月31 日，我們的現金狀況依然強勁，為989 億元人民幣（137 億美元）。活動提供的現金淨額為去年同期為78億元，上季為173億元。

Free cash flow was negative RMB 5.1 billion or negative USD 700.1 million in the first quarter, versus positive RMB 6.7 billion in the same period last year and a positive RMB 14.6 billion in the prior quarter.

第一季自由現金流為負 51 億元或負 7.001 億美元，去年同期為正人民幣 67 億元，上一季為正人民幣 146 億元。

And now for our business outlook. For second quarter of 2024, the company expects the deliveries to be between 105,000 and 110,000 vehicles, representing a year-over-year increase of 21.3% to 27.1%. The company also expects second quarter total revenue to be between RMB 29.9 billion and RMB 31.4 billion, or USD 4.1 billion and USD 4.3 billion, representing a year-over-year increase of 4.2% to 9.4%.

現在談談我們的業務前景。該公司預計2024年第二季的交車量將在10.5萬至11萬輛之間，年增21.3%至27.1%。該公司也預計第二季總收入將在299億元人民幣至314億元之間，即41億美元至43億美元之間，年增4.2%至9.4%。

This business outlook reflects the company's current and preliminary view on its business situation and market conditions, which is subject to change.

本業務展望反映了公司對其業務狀況和市場狀況的當前初步看法，可能會發生變化。

That concludes our prepared remarks. I will now turn the call over to the operator to start our Q&A session.

我們準備好的演講到此結束。我現在將把電話轉給接線員以開始我們的問答環節。

(Operator Instructions)

（操作員說明）

Your first question comes from De'an Wang with Deutsche Bank.

你的第一個問題來自德意志銀行王德安。

[Interpreted]

[解讀]

The first question is about volume. Basically, your guidance second quarter will be 105,000 units and 110,000 units, which means the second half you need to sell 360,000 units, which means monthly volume will be close to 60,000 units. Because MEGA volume was quite small and (inaudible) will be late. So, just (inaudible) the monthly volume will go to 60,000 units (inaudible) challenge. So, if you have some pressure to achieve this number, would you further revise on the (inaudible) volume target.

第一個問題是關於音量。基本上，您第二季度的指導將是105,000台和110,000台，這意味著下半年您需要銷售360,000台，這意味著每月銷量將接近60,000台。因為 MEGA 的音量很小而且（聽不清楚）會遲到。因此，僅（聽不清楚）每月銷售將達到 60,000 台（聽不清楚）的挑戰。因此，如果您面臨實現這一數字的壓力，您會進一步修改（聽不清楚）數量目標嗎？

My second question is about gross margin. Previously, you guided the full year gross margin will be 20%. If you want to maintain 20% gross margin after pricing cut, what's the key driver for the margin? Is it because the volume increase when the monthly volume go to 60,000 units or other driver for maintain at 20% gross margin.

我的第二個問題是關於毛利率。此前，你們指導全年毛利率將為20%。如果你想在降價後維持20%的毛利率，那麼毛利率的關鍵驅動因素是什麼？是因為每月銷量達到60,000台時銷量增加還是其他驅動力維持在20%的毛利率。

This is James. I will take your first question. First of all, the L6 series has been widely recognized by users, for its product strength and price point. And during the initial sales period from 18th April to May -- to 5th May, the accumulated orders of L6 reached over 41,000 units, which was excellent sales performance. The order intake of L6 Series has maintained strong growth momentum post the initial sales period.

這是詹姆斯。我將回答你的第一個問題。首先，L6系列憑藉產品力和價位得到了用戶的廣泛認可。而在4月18日至5月的首發銷售期間－至5月5日，L6累計訂單量超過41,000台，銷售表現優異。 L6系列的訂單量在上市初期就維持了強勁的成長動能。

Additionally, after we implemented the new pricing strategy for Li Auto L7, L8 and L9. Their order flow has also showed ongoing improvements. In summary, our sales momentum has gradually improved, and we are optimistic about the continued ramp-up of the monthly sales going forward.

此外，我們對理想汽車L7、L8和L9實施了新的定價策略後。他們的訂單流程也不斷改善。綜上所述，我們的銷售動能逐漸好轉，我們對未來月銷售量的持續提升持樂觀態度。

And I will hand over to our CFO for the second question.

我將把第二個問題交給我們的財務長。

Our follow-on. I think to us, the most important part after Q1's challenge as (inaudible) mentioned, especially after March 1st. I think the most important part at the current stage is sales recovery. I think this also everyone's primary concern and the company. And as we all know, the auto industry has a significant economy upscale.

我們的後續。我認為對我們來說，這是（聽不清楚）提到的第一季挑戰之後最重要的部分，尤其是 3 月 1 日之後。我認為現階段最重要的是銷售的恢復。我想這也是大家和公司最關心的問題。眾所周知，汽車產業具有顯著的經濟高檔性。

So as our sales can come back, I believe the gross margin pressure will be somehow released. So -- and also with the L6 additionally, upside the sales growth, product mix optimization will be (inaudible) can impact our gross margin.

所以當我們的銷售能夠恢復時，我相信毛利率壓力會得到一定程度的緩和。因此，對於 L6 來說，除了銷售成長之外，產品組合優化（聽不清楚）也會影響我們的毛利率。

And as we implemented along the several actions to control organization (inaudible) which will help the market cutback, and that to remind you, I think we faced those challenges since March. So the second quarter will be the most difficult for the company in this year.

當我們實施了幾項控制組織的行動（聽不清楚）時，這將有助於市場縮減，並提醒您，我認為自 3 月以來我們就面臨這些挑戰。所以第二季將是公司今年最困難的季度。

Your next question comes from Tim Hsiao with Morgan Stanley.

您的下一個問題來自摩根士丹利的 Tim Hsiao。

[Interpreted]

[解讀]

So just want to follow up regarding the sales volume because as management just mentioned, the competition in China, the market has been getting worse year-to-date. Although Li Auto just launched 2024, (inaudible) L6 and also had the reasonable price adjustment. What would be the company's strategy to further boost the volume front here? You say sales stay suppressed? Would the company ever consider to upgrade the spec or further the cut prices to provide the actual impacts to the sales volumes into the second half, not just to L6, but also to the L7, L8, L9 and the battery EV, pure EV into second half. So that's my first question.

因此，我只想跟進銷量，因為正如管理層剛才提到的，中國市場的競爭今年迄今一直在惡化。雖然理想汽車2024年才推出，（聽不清楚）L6也有合理的價格調整。該公司進一步提高銷售的策略是什麼？你說銷售持續受到抑制？公司是否會考慮升級規格或進一步降價，以對下半年的銷量產生實際影響，不僅是L6，還包括L7、L8、L9以及電池EV、純電動車下半場。這是我的第一個問題。

[Interpreted]

[解讀]

First, in terms of pricing strategy, in fact after the price adjustment in April, we received consistent feedback that the current pricing is very competitive in the market, and it's also been very well received by our customers, has shown in continued order intake growth since April.

首先，在定價策略上，實際上在4月份調價之後，我們得到的一致反饋是，目前的定價在市場上是非常有競爭力的，而且也受到了客戶的一致好評，訂單量持續增長。四月以來。

So we don't have any further plans for price cuts. In terms of gross margin, we always believe that as -- for a healthy company, sales and gross margin are the 2 most important operating metrics. And as a company as a 9-year-old car company, Li Auto has continually hold ourselves against these 2 important metrics.

所以我們沒有進一步的降價計劃。就毛利率而言，我們始終認為，對於一家健康的公司來說，銷售額和毛利率是兩個最重要的營運指標。作為一家擁有9年歷史的汽車公司，理想汽車一直在不斷地以這兩個重要指標來衡量自己。

[Interpreted]

[解讀]

So my second question is about expenses. So based on Li Auto, the updated sales target for 2024 and '25, what would be the reasonable sizes of employees, sales networks and sales and marketing expenses as well as R&D spending. And when will the benefit of cost savings be manually reflected in Li Auto's financial? That's my second question.

所以我的第二個問題是關於費用的。那麼，根據理想汽車2024年和25年更新的銷售目標，員工規模、銷售網路、銷售和行銷費用以及研發支出的合理規模是多少。而手動節省成本的效益是什麼時候才能體現在理想汽車的財務上呢？這是我的第二個問題。

This is Johnny. I think given the new year new sales growth target, the company has adjusted very quickly in the last less than 2 months to adjust resource allocation across various attacks, to better align with this year's operating objectives just as we have just mentioned, we focus a lot on operating frequency.

這是約翰尼。我認為考慮到新年新的銷售成長目標，公司在過去不到兩個月的時間裡調整得非常快，調整了各種攻擊的資源分配，以更好地配合今年的經營目標，正如我們剛才提到的，我們重點關注的是工作頻率很多。

I think you had read that in the last 4 years of operation of the company. We expect this adjustment will have some initial impact on the results starting from Q2. Most of them will impact the operating efficacy after the second quarter.

我想您在公司過去 4 年的營運中已經讀到過這一點。我們預計此次調整將從第二季開始對業績產生一些初步影響。其中大部分將影響第二季度之後的經營效益。

So our next question comes from Tina Hou with Goldman Sachs.

我們的下一個問題來自高盛的蒂娜·侯。

[Interpreted]

[解讀]

So my first question is in terms of the new store sales network expansion plan. So previously, we had a target of 400 new stores this year. So just wondering, now with our new strategy, what is the target number there? And also, among the stores, what's your split between the city center stores as well as like city, maybe suburban stores. And in terms of different city tiers, what is your consideration there?

所以我的第一個問題是關於新店銷售網絡的擴張計劃。所以之前我們今年的目標是開400家新店。所以只是想知道，現在採用我們的新策略，目標數字是多少？另外，在商店中，市中心商店和城市商店（也許是郊區商店）之間的比例如何。那麼對於不同的城市層級，您的考慮因素是什麼？

Tina, this is James. I will take your question. So regarding our store expansion plan, and we will -- first of all, we will plan our sales and service networking advance according to sales demand, while expanding our sales network in tens of quantity, we will also continuously optimize the quality of each retail store by offering more showroom vehicles and improving the store space, considering we now have more and more different models.

蒂娜，這是詹姆斯。我會回答你的問題。所以對於我們的門市擴張計劃，我們會——首先，我們會根據銷售需求提前規劃我們的銷售和服務網絡，在擴大我們幾十個銷售網絡的同時，我們也會不斷優化每個零售的品質。考慮到我們現在有越來越多的不同車型，我們透過提供更多的陳列車輛並改善商店空間來商店。

So this year, we have already opened 43 new retail stores with more than half of them having the capacity to display over 9 showroom vehicles. In the meantime, we have closed some smaller ones.

今年我們已經新開了43家零售店，其中超過一半有能力展示9輛以上的陳列車輛。同時，我們關閉了一些較小的工廠。

As of 19th May, the number of total retail stores reached 488. So this is the latest number. And by city tiers, as you just asked, we have achieved 100% coverage of all first-tier cities, new first-tier cities and the second-tier cities, and 89% coverage of third-tier cities.

截至5月19日，零售店總數達到488家。從城市層面來看，正如你剛才問的，我們實現了所有一線城市、新一線城市和二線城市的100%覆蓋，三線城市89%的覆蓋。

We also had 215 showrooms across the country to broaden our coverage of more cities, which help us to penetrate to the Tier 3 and Tier 4 cities, aligned with our new sales target, we are gradually changing our pace of market penetration in order to better suit the current business needs.

我們還在全國擁有215個展廳，以擴大對更多城市的覆蓋，這有助於我們滲透到三四線城市，配合我們新的銷售目標，我們正在逐步改變市場滲透的節奏，以便更好地適合當前的業務需求。

As to the store, types for our new stores, we have gradually increased the proportion of stores in automotive parts, over the past year. In the long run, we will continue to increase the percentage of stores in automotive parts as we expand our model portfolio and improve our brand awareness and influence.

從店面來看，我們新開店的類型，我們在過去的一年逐漸增加了汽車零件店的比例。長期來看，我們將隨著車型的擴大、品牌知名度和影響力的提升，繼續提高汽車零件門市比例。

Your next question comes from Yingbo Xu with Latex.

您的下一個問題來自 Latex 的 Yingbo Xu。

[Interpreted]

[解讀]

So I have two questions. The first one is about autonomous algorithm and the difference of this algorithm and how we see the future of this autonomous thing?

所以我有兩個問題。第一個是關於自治演算法以及該演算法的差異以及我們如何看待這個自治事物的未來？

The second question is about product. How we plan for the pure EV product later this year and next year?

第二個問題是關於產品的。今年晚些時候和明年的純電動產品我們如何規劃？

[Interpreted]

[解讀]

First of all, on the question regarding city NOA. There are three major paths in this area. Completely dependent on HD map, partially independent and some were independent of HD map. And obviously, a completely independent solution is the most difficult path because it doesn't rely on the coverage and update frequency of high HD maps as well as there's navigation coverage, city NOA can work.

首先，關於NOA城市的問題。該區域有3條主要路徑。完全依賴高精地圖，部分獨立，有的獨立於高精地圖。顯然，完全獨立的解決方案是最困難的路徑，因為它不依賴高精地圖的覆蓋範圍和更新頻率，也沒有導航覆蓋，城市NOA就可以工作。

So our plan is to release completely independent, HD map independent AD Max solution to all users in Q3 this year for city NOA. And fundamentally, fully independent solutions is real artificial intelligence in terms of autonomous driving, and it uses data-driven model to mimic human behavior and in place for completely rule-based solutions.

所以我們的計畫是在今年第三季向NOA城市的所有用戶發布完全獨立的、獨立於高清地圖的AD Max解決方案。從根本上來說，完全獨立的解決方案是自動駕駛方面真正的人工智慧，它使用數據驅動的模型來模仿人類行為並形成完全基於規則的解決方案。

And Tesla's concept of end-to-end big model is similar concept driven by data-driven model solution. It's very easy to reach consensus on this conceptual solution, but to implement it requires a lot of data and computing power. And this is not something that all car companies are capable of or have the resources of achieving.

特斯拉的端到端大模型概念是類似的由資料驅動模型解決方案所驅動的概念。這個概念性的解決方案很容易達成共識，但實施起來需要大量的數據和運算能力。而這並不是所有車企都有能力或是有資源實現的。

Therefore, we believe that different companies will like one of those three solutions based on their current situations and capability and resources. And these different choices will result in different products and user value creation.

因此，我們相信不同的企業會根據自己的現狀、能力和資源，選擇這三種解決方案中的一種。而這些不同的選擇將會導致不同的產品和使用者價值創造。

[Interpreted]

[解讀]

The second question on our later BEV products. First of all, we will not be releasing our BEV SUV later this year. The latest plan is to release in the first half of next year. And for two reasons, the first reason is, we believe in order to sell premium BEV SUVs, a necessary requirement is to enough branded charging stations.

第二個問題是關於我們後來的BEV產品。首先，我們不會在今年稍後發布我們的純電動 SUV。最新方案是明年上半年發布。有兩個原因，第一個原因是，我們認為為了銷售優質純電動SUV，一個必要的要求是有足夠的品牌充電站。

We believe a correct level is to get similar levels of Tesla in China. That would be the perfect timing for releasing our next BEV product. And secondly, another constraint is the number of parking spots in stores, instore parking spots to display stock. And this is very critical for us to be able to sell multiple cars across multiple price points and to supply a consistent sales of over 10,000 units per model.

我們認為正確的水平是在中國獲得與特斯拉類似的水平。這將是我們發布下一款純電動車產品的最佳時機。其次，另一個限制是店內停車位的數量、店內展示庫存的停車位。這對於我們能夠銷售多個價位的多款汽車並確保每種車型的銷量穩定超過 10,000 輛來說非常重要。

And in order to achieve that, we need an additional 500 to 600 display spots across the country. Otherwise, we'll be only increasing the number of products rather than the number of sales volume. And that was the exact issue that L8 ran into in the past few months because we decreased the display spots of L8 by 40%. But that is being recovered by now, and we are adding more display spots for the L8.

為了實現這一目標，我們需要在全國範圍內增加 500 到 600 個展示點。否則，我們只會增加產品數量，而不會增加銷售量。這正是 L8 在過去幾個月遇到的問題，因為我們將 L8 的顯示點減少了 40%。但現在這種情況正在恢復，我們正在為 L8 添加更多展示點。

So to summarize, enough charging stations and enough incremental display spots are 2 critical and necessary conditions for selling our BEV SUV product. and we believe we'll reach this point in the first half of next year.

綜上所述，足夠的充電站和足夠的增量展示點是我們純電動SUV產品銷售的兩個關鍵且必要的條件。我們相信我們將在明年上半年達到這一點。

Your next question comes from Paul Gong with UBS.

你的下一個問題來自瑞銀集團的龔保羅。

[Interpreted]

[解讀]

So two questions for me. The first one is sooner or later, we are going to have the full product line within the BEV. Do you consider building the dedicated brands or channel for the BEV products?

那我有兩個問題。第一個是遲早，我們將在純電動車中擁有完整的產品線。您是否考慮為純電動車產品建立專門的品牌或通路？

The second question is, given the huge cash reserve and the share price performance recently. Will you consider share buyback at some time point?

第二個問題是，考慮到龐大的現金儲備和近期的股價表現。您會在某個時間點考慮股票回購嗎？

This is James. I will take your first question. And regarding the BEV and our REV models. So we will stick to our direct sales model in the domestic market. And we will strive to showcase all of our products in our retail stores and showrooms.

這是詹姆斯。我將回答你的第一個問題。關於 BEV 和我們的 REV 車型。所以我們在國內市場會堅持直銷模式。我們將努力在零售店和陳列室展示我們所有的產品。

In the meantime, we have initiated internal discussion on differentiated retail strategy, and we may launch some innovative pilot programs in the future. And we will share additional relevant details in due course.

同時，我們內部也開始討論差異化零售策略，未來可能會推出一些創新試點。我們將在適當的時候分享更多相關細節。

And I handover to our CFO, Johnny, for your second question.

我請我們的財務長約翰尼回答你的第二個問題。

For the share buyback. Currently, we don't have a set plan. And we will (inaudible) make some assessments based on company's staff and it's position, capital market and other (inaudible) cash need for meeting.

用於股票回購。目前，我們還沒有固定的計劃。我們將（聽不清楚）根據公司的員工及其地位、資本市場和其他（聽不清楚）滿足現金需求進行一些評估。

Your next question comes from Yuqian Ding with HSBC.

你的下一個問題來自匯豐銀行的丁宇謙。

[Interpreted]

[解讀]

I got 2 questions. The first is to ask about the growth conviction, especially our total addressable market is mainly hinged on the family users that's largely middle class relevant, but it seems to be melting down. So is the growth coming from the increase in TAM or the relative competition versus the other peers offering, but we are seeing above RMB 200,000 above increasing model supply.

我有 2 個問題。首先是詢問成長信念，特別是我們的總目標市場主要取決於主要與中產階級相關的家庭用戶，但它似乎正在崩潰。成長也來自 TAM 的增加或與其他同行產品的相對競爭，但我們看到模型供應量的增加超過 20 萬元。

And second question is whether the company will consider harvesting some low-hanging fruit in the overseas market with relevance to the development -- the domestic market since the pricing and competition is more favorable and the global OEMs are moving marginally towards hybrid, the range extender seems to be a good solution?

第二個問題是，該公司是否會考慮在海外市場收穫一些與發展相關的容易實現的成果——國內市場，因為定價和競爭更加有利，而且全球原始設備製造商正在略微轉向混合動力（增程器）似乎是一個很好的解決方案？

[Interpreted]

[解讀]

So on the first question, our focus will remain on the market of NEV vehicles priced over RMB 200,000 for family users. And this will continue to be our focus in the mid to long run, because we firmly believe that there's still much to be done in the market in terms of product, and there are many areas where we can improve to better serve our users and create value for them in the long term.

所以第一個問題，我們的重點還是20萬元以上家庭用戶的新能源汽車市場。而這將繼續是我們中長期關注的重點，因為我們堅信市場在產品方面還有很多工作要做，還有很多地方我們可以改進，以更好地服務我們的用戶並創造從長遠來看對他們有價值。

Okay. I will take your second question. And regarding the overseas market strategy. So as Li Auto vehicle models became increasingly popular overseas, we will accelerate the establishment of our aftersales servicing networks in order to provide the best service experience for our overseas users.

好的。我來回答你的第二個問題。以及關於海外市場策略。隨著理想汽車車型在海外的日益普及，我們將加速售後服務網路的建設，為海外用戶提供最佳的服務體驗。

We will build in aftersales service network in international market where we already have been established the user base. We plan to start our own aftersales network -- aftersales service network in Central Asia and in the Middle East, this year, which is ongoing right now.

我們將在已經建立用戶群的國際市場建立售後服務網絡。我們計劃今年啟動自己的售後服務網絡——中亞和中東的售後服務網絡，目前正在進行中。

We will select appropriate dealers for market expansion in overseas countries, and regions outside Western Europe and North America.

我們將選擇合適的經銷商進行海外國家以及西歐、北美以外地區的市場拓展。

Given the adjustment of this year's sales target, we will focus our efforts in the domestic market this year, we will share more details in due course.

鑑於今年銷售目標的調整，今年我們將聚焦在發力國內市場，更多細節我們會適時公佈。

Your next question comes from Ming-Hsun Lee with Bank of America.

您的下一個問題來自美國銀行的 Ming-Hsun Lee。

[Interpreted]

[解讀]

So recently, media reported company has certain reorganization, and in the future, what is your strategy for your reorganization and what department or what area you will input more resource to develop?

那麼最近有媒體報道公司有一定的重組，那麼未來你們的重組策略是什麼，你們會在哪些部門或哪些領域投入更多的資源來發展？

[Interpreted]

[解讀]

So in this most recent organizational restructuring, one most important change is we've established a new department called quality operations. And thinking behind this change is to allow our business units to really focus on high-quality decision-making and operating efficiency, instead of focusing on processes and operating these processes. And typically, for an organization change, it takes about 12 to 24 months to see real results. So we think a good time to evaluate would be sometimes in 2025 and 2026.

因此，在最近的組織重組中，最重要的一個變化是我們成立了一個名為品質營運的新部門。而這個改變背後的思考是讓我們的業務部門真正專注於高品質的決策和營運效率，而不是專注於流程和營運這些流程。通常，對於組織變革，大約需要 12 到 24 個月才能看到真正的結果。因此，我們認為評估的好時機有時是 2025 年和 2026 年。

[Interpreted]

[解讀]

So this year, we can see Li Auto's development in NOA is speeding up. So right now, for your client base, how important do you think NOA for your customer base? And after if this open FSD (inaudible) in China, that at least change consumers' behavior. And in the future, if some auto companies, they don't have NOA functions on the car, are they able to sell (inaudible)?

所以今年我們可以看到理想汽車在NOA的發展正在加速。那麼現在，對於您的客戶群來說，您認為 NOA 對您的客戶群有多重要？如果在中國開放 FSD（聽不清楚），那至少會改變消費者的行為。未來，如果一些汽車公司，他們的車沒有NOA功能，他們能賣嗎（聽不清楚）？

[Interpreted]

[解讀]

First of all, we firmly believe that NOA makes an easier and more and safer for our users to track. As we've seen in the latest release of our mapless NOA beta version in May, the feedback from the first group of users, over -- they drive over 65% of their total mileage using city NOA. And this penetration rate is a good testament to their -- to widely accepted related version of NOA model users.

首先，我們堅信 NOA 可以讓我們的用戶更輕鬆、更安全地進行追蹤。正如我們在 5 月最新發布的無地圖 NOA 測試版中看到的那樣，第一組用戶的回饋表明，他們使用城市 NOA 駕駛了超過 65% 的總里程。而這樣的滲透率很好地證明了他們——廣泛接受相關版本的NOA模型用戶。

And in terms of Tesla's FSD v12, we believe that the next stage of competition across for smart electric vehicles, autonomous driving will be a primary reason for our users as they consider in buying cars. FSD v12 after it becomes available in China, we will only make users focus even more on autonomous driving functionalities as well as experience, which will further enhance the importance of the creation of industry standards and the development of the technology in the industry. And again, in return, drive different car companies to invest even further in improving the performance of NOA features.

而就特斯拉的FSD v12而言，我們相信下一階段智慧電動車的競爭，自動駕駛將成為我們用戶購買汽車時考慮的首要原因。 FSD v12在中國上市後，只會讓用戶更加關注自動駕駛的功能和體驗，這將進一步提升業界標準制定和技術發展的重要性。作為回報，再次推動不同的汽車公司進一步投資以提高 NOA 功能的性能。

As we are reaching the end of our conference call now, I'd like to turn the call back over to the company for closing remarks. Ms. Janet Chang, please go ahead.

由於我們的電話會議即將結束，我想將電話轉回公司進行結束語。張珍妮女士，請講。

Thank you once again for joining us today. If you have any further questions, please feel free to contact Li Auto's Investor Relations team. That's all for today, you may now disconnect your lines. Thank you.

再次感謝您今天加入我們。如果您還有任何疑問，請隨時聯繫理想汽車投資者關係團隊。這就是今天的全部內容，您現在可以斷開線路了。謝謝。

Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.

本文字記錄中標記為[已翻譯]的部分是由現場通話中的口譯員朗讀的。