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.
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.
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.