On September 7, LEAPMOTOR fell 3.39% in regular trading, trading at HKD 36.5 per share with turnover of approximately HKD 59.15 million, extending the post-earnings correction that began after the interim results release on August 24.

The decline is driven by management's significant downward revision of the full-year net profit guidance from RMB 5 billion to approximately RMB 3 billion during the earnings call — a 40% cut. The company's H1 comprehensive gross margin dropped to 11.7% from 14.1% year-over-year, with vehicle sales gross margin at only 10%-11%. Of the RMB 2.1 billion attributable net profit, carbon credit income contributed an estimated RMB 800-900 million, raising concerns over the core vehicle-selling business's profitability. Free cash flow also contracted sharply from RMB 860 million to RMB 140 million year-over-year. Despite H1 revenue rising 57.2% to RMB 38.1 billion and global deliveries surging 60.8% to 356,487 units, the market remains focused on the widening gap between volume growth and profit delivery, with the stock declining nearly 10% since the earnings release.

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