On May 20, Chinese electric vehicle manufacturer, Ideal Auto, released its financial report for the first quarter of 2024, showing a loss for the period. The unaudited financial report for the quarter ending on March 31, 2024, revealed that Ideal Auto had total revenue of 25.6 billion yuan, representing a 36.4% year-on-year increase but a 38.6% decrease from the previous quarter. The net profit was 591 million yuan, down by 36.7% year-on-year and 89.7% quarter-on-quarter, with an operating profit margin of -2.3%. The performance in the first quarter of this year declined significantly compared to the last quarter of the previous year. Furthermore, Ideal Auto’s cash reserves decreased from 103.67 billion yuan at the end of 2023 to 98.9 billion yuan in the first quarter of this year.
Ideal Auto attributed the decline in performance to the impact of seasonal factors during the Chinese New Year and lower vehicle delivery volumes in March due to sales orders falling below expectations.
Official data indicated that Ideal Auto delivered a total of 80,000 vehicles in the first quarter of 2024, a 52.9% year-on-year increase. Previously, during a financial report conference call in 2023, Ideal Auto had forecasted a delivery volume for the first quarter to be between 100,000 and 103,000 vehicles.
Some investors believe that Ideal Auto and certain executives made false statements, publicly acknowledging misleading information, which violates securities laws and causes damage to investors. Beijing lawyer Hao Junbo stated on May 15 to Caixin that some investors have sued Ideal Auto and certain executives for securities fraud in the United States. These investors are seeking a court order for Ideal Auto to compensate for losses resulting from its unlawful actions leading to a decline in stock prices.
According to a report by 21st Century Business Herald on May 16, Ideal Auto is currently undergoing a new round of company-wide layoffs, with layoffs exceeding 18%. Based on the figures from the 2023 financial report, Ideal Auto had close to 31,600 employees, and with this layoff ratio, over 5,600 employees are expected to be affected.
As of the local time on May 20, Ideal Auto closed at $21.71 per share on the US stock market, a decrease of 2.78%, with a total market value of $23.035 billion.
On May 21 at 9:26 am local time in Hong Kong, Ideal Auto was traded at 85.25 Hong Kong dollars per share, a decrease of 14.66%, with a total market value of 169.8 billion Hong Kong dollars.