Zhejiang Leapmotor Technology, an electric-vehicle manufacturer once considered a fringe player in China, is currently outperforming its startup competitors in both sales and stock market gains this year, according to analysts. The Hong Kong-listed shares of the carmaker have doubled in value since January, surpassing better-known peers such as XPeng and Xiaomi, and have surged more than 200 per cent from their low point a year ago. Leapmotor designs, develops, manufactures, and sells smart electric vehicles. The company also develops vehicle components such as electric powertrains, chassis, body, and electronics.
Leapmotor has increased its sales target for 2025 to 500,000 units, a significant jump from the approximately 290,000 units projected a year earlier. The company is also expected to achieve its first annual profit. This decade-old company has garnered investor confidence by offering competitive pricing, largely due to its strategy of manufacturing a substantial portion of its components internally. A key factor behind this approach is the electronics and software expertise of co-founder Zhu Jiangming, who has played a crucial role in driving the company’s research and development initiatives.
According to Xiao Feng, co-head of China industrial research at CLSA Hong Kong, Leapmotor’s price competitiveness is noteworthy, offering large vehicles at mass-market prices due to roughly 70 per cent vertical integration. He added that they see strong upside potential driven by a robust product cycle and exceptional capital efficiency.
The company’s shares closed at $HK65.40 ($8.36) on Friday, a significant increase from the previous year’s low of $HK19.54 set in August. Based on a Bloomberg survey of analysts, the shares are projected to climb to $HK74.89 in the next 12 months.
