On August 27, LEAPMOTOR fell 3.04% in regular trading, trading at HK$38.88/share, with turnover of HK$31.67 million. The stock has been under sustained selling pressure since the company released its H1 interim results on August 24.

While LEAPMOTOR reported H1 revenue of RMB 38.1 billion (up 57.2% YoY) and net profit of RMB 208 million (up 531% YoY) with deliveries of 356,487 units (up 60.8% YoY), the market focused on deteriorating profitability metrics. Gross margin fell to 11.7% from 14.1% a year earlier due to rising raw material costs and product mix shifts. Free cash flow contracted sharply from RMB 860 million to RMB 140 million. Critically, management slashed full-year net profit guidance from approximately RMB 5 billion to RMB 3 billion during the earnings call, with full-year gross margin projected at only 13%-14%, continuing to weigh on sentiment. CICC maintained an Outperform rating with a target price of HK$60.80, implying 42% upside.

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