Investing.com -- Li Auto ’s (HK:2015) (NASDAQ:LI) shares fell on Wednesday as investors reacted to the electric vehicle maker’s slower month-to-date (MTD) sales, and reports that Meituan founder Wang Xing had further reduced his stake in the company.
The stock was down 4.1% at HK$104.1, underperforming the broader Hang Seng index, which declined 1.1%.
The carmaker’s U.S.-listed shares also slipped 1.4% in premarket trading.
Li Auto’s MTD sales are currently running below the company’s second-quarter volume guidance of 123,000 to 128,000 units, or 48,000 to 53,000 for June, reflecting a 34% to 38% achievement rate in the first half of the month.
Furthermore, according to Chinese media, Wang offloaded around HK$650 million ($82.8 million) worth of Li Auto (NASDAQ:LI) shares between June 10 and 13. The sale lowered his stake to 20.61%, though he remains the firm’s second-largest shareholder behind founder Li Xiang.
While the latest move appears to be part of a broader portfolio adjustment, Wang has been gradually cutting his position in Li Auto since early 2023.
Following today’s sell-off, the company’s shares in Hong Kong are now down more than 13% since June 9.
“As the autos sector tends to experience high beta moves, any doubts about operations could trigger a knee-jerk reaction,” Morgan Stanley (NYSE:MS) analysts led by Tim Hsiao said in a note.
Still, they believe the negative impact of slower June sales “shall be transient and order momentum shall recover soon.”
“We don’t think the lukewarm June sales have disrupted the thesis of 2H operational resurgence, which would be underpinned by the new model cycle kicking in,” they continued.
With expectations now lower, strong execution by Li Auto’s team, insights gained from last year’s Mega launch, and potentially more competitive pricing could lead to an upside surprise from the upcoming I8, analysts said.
Morgan Stanley reiterated an Overweight rating on the stock.
Li Auto shares are still up roughly 11% year-to-date. The company delivered solid first-quarter revenue, although profits came under pressure amid intensifying price competition in China’s EV market.
