J.P. Morgan maintains Leapmotor Overweight and raises the target price to HK$90

Overview

This is a J.P. Morgan company research report on Zhejiang Leapmotor Technology Co.,Ltd (9863.HK). The report maintains an Overweight rating and raises the Dec-26 target price to HK$90. Its core thesis is that Leapmotor will enter a key model cycle around the Beijing auto show, and that new models such as D19, A05 and premium MPV, combined with EU export momentum, are likely to deliver comparatively strong sales growth among China new energy vehicle companies.

Core views

The core view is that although Leapmotor’s stock has risen in the short term, there is still further upside potential. J.P. Morgan expects the D19 six-seat premium SUV, A05 compact BEV sedan, and six/seven-seat premium MPV to generate new order intake and sales leverage; at the same time, the export business, especially in Europe, remains strong, which could enable the company to deliver about 90% QoQ sales growth in 2Q26 and about 100% HoH growth in 2H26. On the earnings side, 2026E and 2027E forecasts were revised up, and carbon-credit income, technology service fees paid to FAW, and electronic component sales are also considered supportive for profitability.

Analysis framework

The report combines a top-down assessment of industry strength and auto-show catalysts with bottom-up analysis of new model launch timing, price bands, powertrain mix, export momentum, and revised earnings forecasts, and estimates the target price using a blended EV/sales and price/sales multiple framework.

Methodology notes

• Valuation methodsBlended EV/sales and price/sales valuation

  The Dec-26 target price of HK$90 is based on a mix of 0.4x EV/sales and 0.8x price/sales multiples for 2026E.

  J.P. Morgan believes new model launches will drive a sales rebound, so it uses a higher PS multiple, references the peer 2026 average of around 1x PS in the China EV industry, and factors in weakening China EV demand and deteriorating competition.

• Earnings revisionEPS upgrade

  2026E/2027E earnings forecasts were raised to reflect improved sales visibility and contributions from non-auto businesses.

  The chart shows adjusted EPS 26E was raised from Rmb1.62 to Rmb1.87, and adjusted EPS 27E from Rmb2.68 to Rmb3.25. The body also notes that carbon-credit income, FAW technology service fees, and electronic component sales support profitability.

• Event catalystBeijing auto show and model cycle

  The launch of new models before and after the auto show could prompt order and sales expectation re-rating.

  The report notes that China auto stocks have historically shown mild positive returns ahead of auto shows, and that Leapmotor’s launch timing for D19, A05 and MPV could cause the market to pre-price incremental order flow.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• 9863.HK

  Core coverage name

  Strengths

  Frequent new model launches across D19, A05 and MPV cover different price bands and powertrain demand; export momentum, especially in the EU, is strong; earnings forecasts were revised up and the target price increased.

  Weaknesses

  The China NEV market is highly competitive, and demand slowdown and price competition may pressure valuation multiples and profit margins.

  Comparison

  The report says Leapmotor is expected to have one of the strongest 2Q26 and 2H26 sales dynamics among China EV companies; BBG ANR is 36|1|0, with market consensus skewed positively.

  Risks

  If orders for D19, A05, or MPV fall short of expectations, or export growth slows, the upside case for sales and earnings revisions will come under pressure.

Key data

• RatingOverweightThe report maintains an Overweight rating.
• Current share priceHK$54.40Price date: 2026-04-15.
• Target priceHK$90.00Dec-26 target price; prior target was HK$56.00.
• Potential upside约65%Based on disclosed HK$54.40 current price versus HK$90 target price.
• 2026E Adj. EPSRmb1.87Previous value Rmb1.62, revised up 15.6%.
• 2027E Adj. EPSRmb3.25Previous value Rmb2.68, revised up 21.3%.
• Expected 2Q26 sales growthabout 90% QoQ, about 50% YoYSupported by new model launches and export business.
• Expected 2H26 sales growthabout 100% HoH, about 60% YoYDescribed as among the strongest momentum among China EV companies.
• Full-year sales forecastabout 960k vehiclesCorresponding to around 60% growth.
• Expected D19 price bandabout Rmb200-220k+Six-seat premium SUV, offering EREV and BEV powertrain options.
• Expected A05 price bandabout Rmb50-60kCompact BEV sedan, expected to be launched in late May.

Impact & implications

If J.P. Morgan’s views on the model cycle and export momentum prove correct, Leapmotor could deliver significant sales growth and revised earnings upgrades in 2026, with stock drivers increasingly coming from company-specific factors rather than broad market or style factors. However, valuation already reflects some optimistic expectations, and future order intake, delivery execution and competitive dynamics will determine how credible the target price is.

Risks

• Competition in the China NEV market is more intense than expected.
• Vehicle deliveries come in below expectations.
• A slowdown in industry demand or worsening competitive conditions could compress valuation.
• If conversion of new model orders and delivery ramp are slower than expected, the sales growth assumptions may weaken.
• J.P. Morgan disclosed that it may have business relationships with the covered company; investors should be aware of potential conflicts of interest.

What to watch

• Pricing, order intake, and delivery cadence for D19 after its launch on April 16, 2026.
• Market reaction and competitor pricing for Leapmotor new models during the Beijing auto show.
• Progress of A05 rollout at the end of May and six/seven-seat premium MPV in June.
• Whether 2Q26 sales approach the roughly 90% QoQ growth assumption.
• Whether 2H26 sales achieve roughly 100% HoH growth.
• Whether EU export business remains strong.
• The actual profitability contribution from carbon-credit income, FAW technology service fees, and electronic component sales.