CICC has released a research report indicating that LEAPMOTOR's share price corresponds to price-to-earnings ratios of 17.6 times for 2026 and 10.0 times for 2027. The firm maintains its Outperform industry rating and HK$60.80 target price, which implies 25.1 times 2026 earnings and 14.3 times 2027 earnings, representing a 42.2% upside from the current share price.
First-half 2026 results aligned with market expectations. LEAPMOTOR reported revenue of RMB 38.11 billion for 1H26, up 57% year-over-year, with net profit attributable to shareholders of RMB 208 million, a 531% increase year-over-year. In 2Q26, the company generated revenue of RMB 27.29 billion, up 92% year-over-year and 152% quarter-over-quarter, with net profit attributable to shareholders reaching RMB 598 million, up 267% year-over-year and turning positive quarter-over-quarter. The 1H26 results met market expectations.
New models continue to ramp up volumes, with strong momentum in overseas expansion. 2Q26 revenue grew 92% year-over-year and 152% quarter-over-quarter to RMB 27.29 billion, primarily driven by: 1) sales volume increasing 84% year-over-year and 124% quarter-over-quarter to 246,300 units in 2Q26, including 19,500 units of the D19 model; 2) export volume surging 373% year-over-year to 96,300 units in 1H26, already exceeding the full-year 2025 figure; and 3) revenue per vehicle rising 4% year-over-year and 13% quarter-over-quarter to RMB 111,000 in 2Q26. CICC believes that as new models are gradually launched, the company's revenue is expected to grow steadily.
Gross margin recovered sequentially, reflecting economies of scale. The company's gross margin stood at 11.7% in 1H26, improving to 12.6% in 2Q26, up 3.1 percentage points quarter-over-quarter. The recovery was mainly attributed to enhanced economies of scale from higher sales volumes and batch deliveries of the high-margin D19 and D99 models. On the expense side, the selling, administrative, and R&D expense ratio decreased 4.6 percentage points year-over-year and 8.4 percentage points quarter-over-quarter to 11.6% in 2Q26, driven by continued lean management and gradually emerging economies of scale. Looking ahead, CICC believes the company's profitability is poised for steady improvement as D-platform models progressively ramp up.
Overseas market expansion continues, with localized production advancing in parallel. The company has been actively expanding into international markets, having entered more than 45 markets globally with over 1,000 sales outlets as of the end of June. According to company announcements, the Malaysia plant has commenced mass production of the locally assembled C10 model and plans to launch the B10 model in 3Q26, while the Zaragoza plant in Spain is expected to begin B10 production in 3Q26 and trial production of the B05 model within the year. CICC estimates that with channel expansion and localized capacity introduction, the company's export business will continue to contribute incremental growth.
Risk factors: new model ramp-up may fall short of expectations, intensifying industry competition, and exports may underperform.