Li Auto stock rose over 6% in overnight trading.
Morgan Stanley reiterated an Overweight rating on the stock. “As the autos sector tends to experience high beta moves, any doubts about operations could trigger a knee-jerk reaction,” Morgan Stanley analysts led by Tim Hsiao said in a note.
Still, they believe the negative impact of slower June sales “shall be transient and order momentum shall recover soon.”
“We don’t think the lukewarm June sales have disrupted the thesis of 2H operational resurgence, which would be underpinned by the new model cycle kicking in,” they continued.
With expectations now lower, strong execution by Li Auto’s team, insights gained from last year’s Mega launch, and potentially more competitive pricing could lead to an upside surprise from the upcoming I8, analysts said.
The Li i6 will be produced at Li Auto's factory in Beijing, where the company is headquartered, and its factory in Changzhou, Jiangsu province.
The SUV has a curb weight of 2,515/2,380/2,395 kilograms and supports a maximum speed of 180 kilometers per hour.
It uses lithium iron phosphate (LFP) batteries, with suppliers including CATL (SHE: 300750) and Sunwoda.