FAST NEWS: Leapmotor first-half sales accelerate, but costs remain high

The Latest: Electric vehicle (EV) maker Zhejiang Leapmotor Technology Co. Ltd. (9863.HK) on Thursday reported a net loss of 2.21 billion yuan ($308 million) in the first half of this year, narrowing slightly from 2.27 billion yuan in the same period last year.

Looking Up: The company’s revenue jumped 52.2% year-on-year to 8.85 billion yuan, mainly due to higher deliveries of its EV and their parts.

Take Note: The company’s R&D expenses jumped 48.4% to 1.22 billion yuan, while its cost of sales rose 42.1% to 8.75 billion yuan, as it spent heavily on product development and invested in intelligent driving technology.

Digging Deeper: Leapmotor was established in 2015 by its founding group and defense technology company Zhejiang Dahua Technology (002236.SZ). It has launched five car models since 2019, targeting the mid- to high-end of China’s EV market. It was the country’s tenth largest manufacturer with 144,555 units sold last year, the same year it listed on the Hong Kong Stock Exchange. Like its counterparts, Leapmotor has yet to turn a profit due to its high costs, and has accumulated losses of more than 14 billion yuan over the past three and a half years.

Market Reaction: Leapmotor’s shares fell on Friday and closed down 1.8% at HK$22.25 by the midday break. The stock now trades at the lower end of its 52-week price range.

Translation by A. Au

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