Insights

Why Li Auto Shares Popped This Week

What happened

The first full trading week of June was a good one for China-based technology stocks. Electric vehicle (EV) maker Li Auto (NASDAQ: LI) was no exception. Li shares have been on fire since the company reported its first-quarter earnings a month ago. Shares are up 60% since then. That move got another boost this week, with the stock up about 15%, according to data provided by S&P Global Market Intelligence.

So what

Gains in the shares accelerated this week as Chinese regulators eased pressure on companies in the technology sector. Steps taken this week included the conclusion of a year-long probe into ridesharing company DiDi Global and the lifting of a ban on new users. Chinese technology stocks gained on that news, and Li stock joined in that momentum.

Now what

When Li reported its first-quarter update last month, the company said deliveries of its Li One new energy vehicle had soared more than 150% year over year. Total revenue jumped an even more impressive 167.5%. The One is Li’s only vehicle offering and is an electric vehicle that also uses a small gasoline engine to boost travel range. 

Li’s first-quarter results were made to look even better this week when competitor Nio provided its quarterly report. Nio said its deliveries had increased only 28.5% versus the 2021 first quarter, and it also noted a drop in profit margin both year over year and sequentially. 

By contrast, Li’s gross margin jumped by more than 500 basis points year over year and also ticked higher sequentially versus the 2021 fourth quarter. Investors boosted Li shares this week as the market took a new look at its first-quarter results, as well as a more general tailwind from easing regulatory concerns for Chinese technology companies. 

Howard Smith has positions in Nio Inc. The Motley Fool has positions in and recommends Nio Inc. The Motley Fool has a disclosure policy.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex Securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here To Get Started
FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here For More Info