Hello, everyone. Welcome to Q1 2026 earnings conference call from Leapmotor. We have here with us CFO of Leapmotor, Mr. Li Tengf ei. Joint-President of Leapmotor, Mr. Wu Qiang, as well as Mr. Shen Ke, Board Secretary. First, Board Secretary Mr. Shen Ke will read the disclaimer statement. Hello, everyone. I am Shen Ke, Board Secretary of Leapmotor. The earnings conference call may contain forward-looking statements, including, but not limited to, statements regarding the company's future financial conditions, strategies, objectives and metrics, and the future market development conditions in which the company participates or may participate. These statements are based on the company's existing and future business development strategies and assumptions regarding the company's future business environment. They inevitably involve known or unknown risks and uncertainties. These factors the companies cannot foresee or control may cause the company's actual performance and the performance of this industry to differ from the future performance expressed or implied in the forward-looking statement. Therefore, we caution you not to place undue reliance on the forward-looking statements discussed in this conference call. These statements reflect only the opinions held by the company's management as of the date of this conference call, and the company has no obligation to update or revise any statements made in this conference call in light of new information, future events or other circumstances. The forward-looking events discussed in this conference may also fail to occur due to various uncertainties. The above disclaimer applies to all forward-looking statements mentioned in this conference call. Shareholders and potential investors are hereby reminded that none of the content contained in this earnings conference call constitutes any investment advice, nor does it form the basis or foundation for any contract, commitment or investment decision. Shareholders and potential investors are requested to act with caution when buying or selling the company's shares. Thank you, Mr. Shen Ke. I'm going to hand over to Mr. Li Tengfei, CFO of the company, to brief us on the earnings of Q1 2026. Dear investors, good evening. I am Li Tengfei. I will give you an update of our Q1 results briefly. First, from a financial perspective. In 2026, in Q1, the company's revenue is CNY 10.8 billion, up by 8%. The revenue growth is more about car delivery and parts delivery increase. Because of the product mix change, the ASP dropped and part of that gain is offset. GP margin is 24% in 2024. In 2025 is 25.9%. In 2026, it dropped to 16%. The major reason is because the product mix change and we continued our management to control. In terms of strategy, equity holders that a loss attributable to equity holders also changed in Q1, and this increase of loss is due to GP margin growth and expense increase. In 2026, the Q1's operation cash flow is - CNY 6.6 billion. Free cash flow is - CNY 7.4 billion. Our capital on hand is sufficient. Cash and cash equivalent, the fair value and the bank balance is CNY 30.63 billion. In terms of sales revenue in Q1, our sales is 110,000 units. Our overseas sales has created historic high, is exceeded 40,000 units. This is a major increase with all our product mix, product offensive started. We also created a new monthly sales exceeding 70,000 units, ranking number one among all EV startups. In April, overseas sales is exceeds 14,000 units. We have created some new blockbusters, models. Our new model has exceeded 10,000 orders within the first 48 hours. The test drive number also created new high for the company. Our D19, within 15 days of launch, and the order has exceeded 15,000 units. All our models have generated a very good sales revenue. C-series exceeded 8,000 units. For B-series, the annual delivery has exceeded 230,000 units. In terms of product, A10 was launched, for the first time, we used LiDAR and OTA within the price range of CNY 100,000, it has become a new buzzword. For A10, the positioning is a global product. The focus is technology democratization. It has a very long drive range, together with Qualcomm's 8295 and 8650 chips. Oil-cooled drive and other new technologies. This is a new choice for the product, for the customers who seek high quality products. In April 16th, our flagship E series, E19, was also launched with 10 years technology strength. The price range is very competitive. It's around CNY 220,000. A lot of new orders and customer attracted to the brand, becoming a new flagship models. D19 EREV model also using largest EREV batteries. The pure electric range exceeded 500km and using CATL's cell. It also supports the 1000V high-voltage architectures. The total computing power is 1280 TOPS. This is also equipped with ADAS system. For this D19 with great design, driving range, price and safety, this is a new choice at the price range of CNY 300,000 SUV. Also, D99 also launched its 10 years celebration model. At this year's Beijing Auto Show, it attracted new public attention. We started the presale in June, and delivery will start in July. D99 is a new important model. Also a lot of competitive features providing top design, top range and top driving control and a lot of luxury experience. This is a highly competitive product within the SUV 1 00,000 MPV market. With the D99's update and facelift, it will create new success. Well, we're going to equip more new technology to these flagship models. B05 Ultra was also debuted in Beijing Auto Show this April. This the price range is CNY 150,000, providing to the younger consumers a more sporty choice. With a great driving control and a ADAS assistance, we have a complete update. The 5 seconds acceleration from 0 to 100 km and also high quality interior materials with city NOA. Based on our understanding of young customers' needs, we feature on not only technology and function, but also providing emotional values. This is filling the void of the pure electric vehicle market at the price range of around CNY 150. The sales ever since its launch has exceeded 20,000 units, ranking top in this segment. B-series has now more members in its family, and this is, we believe, a new blue sea. In terms of R&D, we have our central domain control system, which is used in D19. Using dual chip and super large storage, we are making this cockpit more smart and more intelligent. It's like a brain controlling the whole vehicle. The computing power can be distributed dynamically based on different driving scenarios. GPU CPU is focused for the entertainment function, and the hardware resources can be fully utilized. The cockpit and the driving system can have exchange of data. This is providing better driving and cockpit experience. At the same time, we also support milliseconds data exchange with minimum latency so that all experience is reliant. C-series and B-series in 2026 will use LEAP 3.0 and 3.5 architecture so that we can demonstrate our in-house technology development capabilities, so that high-level ADAS will be more popular, not just on premium models. In terms of channel, by the end of March, our sales and service network has covered 295 cities. 18 new cities. We have 993 stores and over 500 service stores. On county level, we are expanding our network. We have registered 613 outlets. We're going to increase our channel coverage. In terms of retail, in Q1 2026, we continue to focus on the management of the life cycle of our customers, focusing on tiered management of our outlets, creating new records. By the end of Q1, for NEVs market, our market share has increased to 4.22, ranking first among EV startups. With our prospect management and sales procedure standardization, our test drive has increased by over 10%. At the same time, for the key stores, we are also trying to increase the conversion rate by implementing more strict management process. We have a six-star rating of our stores, so that our stores will be classified into different types. We can have strategies addressing their existing problems to drive up the overall service quality. In Q1, in terms of service, we focus on the improved mobility experience for our customers and more easy maintenance and repair. The customers can see very clearly their work order. Especially on holidays, we provide free road aid. Over 200,000 customers booked the maintenance in our store. Over 1.2 million customers entered our stores for repair or maintenance. For 122 stores, serving a total of over 4,000 groups of customers, and the customer satisfaction exceeds 90%. We are also providing dedicated, say, service advisors to our customers, so they can provide more professional services. Our NPS service is 95.98%. In 2026, we will continue to focus on customer needs. Providing better customer experience so that service can also be our great reputation. In 2026 Q1, our export has exceeded 40,000 units, and this is over 42% growth versus the same period last year. This is also leading the export of EV brands in China, especially among 16 European countries. The registered number of Leapmotor has grown by 726%. In the 12 countries in EU, our BEV sales exceed 170,000 units. In March, the total registered plate exceeds 5,000, and in April, it exceeds 4,000. Still number one for the BEV markets. By the end of March 2026, in Europe, Middle East, Africa, Asia Pacific, over 40 markets, we established around 1,000 outlets. In Europe, exceeds 850. In Asia Pacific, over 50. South America exceeding 30 outlets. On January the 11th, A10 was debuted at Brussels Auto Show, and in Q3 this year, it's going to be launched to the market because of its design and its functionality is going to meet the needs of European customers. In terms of ESG, in Q1, the company, for the third consecutive year, we were MSCI AA grade. At the same time, among the sustainable grade worldwide, our rating has improved from copper to zero. Comprehensive evaluation has increased from 35% to the top 15%. In the future, we will continue to step up our efforts in ESG. Now we're going to open the floor for questions. Thank you, Mr. Li. Well, if you join us through dialing in, you can press star and then one to ask questions. If you joining us online, then you can text in the questions in the chat box. We now are taking the first question from the investor. Please introduce yourself first. Good evening, management. I'm Lin Bani. Thank you very much for the introduction. I have two questions. Number 1, for Q1, do we have a GP margin in Q1? Any reasons for the GP margin change? How much is due to cost change, and how much is because product mix change? That's my first question. Would you like also to ask your second question? Okay. My second question is for Q2. Not sure if you have updated your guidance in terms of sales and GP margin. The sales guidance is CNY 240,000-CNY 250,000. Any changes on that? Question number 1, for the vehicle GP margin in Q1, our company GP margin is 9.4%, around 10%. The vehicle margin as compared with last year's GP margin, 2025, is similar to last year. Last year's whole year is over 7%. I am not going to disclose the detail, but it is over 7%. For vehicle GP margin versus Q4 2025 and the same period in 2025, it is going down. There are several reasons for that. Number 1, in Q1, the scale is different. If you look at the volume, it's smaller in Q1, which is in line with the industry situation, industry trend. With a smaller volume, our capacity and capacity reserve and parts reserve increased so that our utilization rate also dropped. That's one reason. Secondly, because of the product mix change in Q1 versus same period last year. Last year is mostly C-series. This year, B-series has a higher share, and B-series has slightly lower margin than C-series. Also, material price. If you look at Q1 this year, the material price has a limited impact on our GP margin because our major raw materials has already been reserved last year. That stockpile can cover our Q1 manufacturing needs. That is to address your first question. The second question is for the guidance in Q2. Earlier, as you said, our total sales right now is around 240,000-250,000 units in Q2. We believe this is achievable because in April we have monthly sales exceeding 70,000 units. On June 1st, we are going to announce our sales volume in May. By then, you can see that we are confident for that. For the GP margin in Q2, we believe that the GP margin versus Q1, we believe the margin will grow, will increase. As for how much, I don't think we can go back to the level of Q4 2025, but it's not going to be too far. It's around 12%-13% GP margin for Q2. Back to the first question, because it's for our vehicle business and our vehicle margins are my input. Thank you, Mr. Li. We will now take the next question. Hello, I am [Yin Xinchi] from CITIC automotive team. Congratulations for Q1 performance, especially deliveries in overseas market, creating a new high exceeding 40,000 units. I want to know any updates of your target for the full 2026. In your key markets, what is your capacity plan working together with Stellantis? Stellantis announced that you're going to strengthen your cooperation in Europe. Maybe talk a little bit more on Europe, Southeast Asia and Latin America. Thank you for the question. Let's start with overseas sales. In our 2026 guidance, overseas sales is 100,000-150,000 overseas sales. In Q1, our overseas sales was very good, very strong growth momentum. I can tell you that in Q1 or April, our overseas sales can be better than our figure. There are several reasons. The disruptions in the shippings and other reasons, there are some small impact. We could have done better. At this moment, we still believe that we don't want to adjust or revise our earlier guidance. Now, based on Q1 performance, we think that our annual overseas target of 150,000 is very, very possible, and the possibility has increased tremendously. That's for export. In key markets, at the beginning of the month, Stellantis made an announcement. I am sure that many of you are following this very closely. Our production in Europe, our factory in Spain. We have also mentioned that in the previous conference. The progress is smooth. In Q3, we expect that the Spanish factory will start production for Europe. In Stellantis' announcement, they also mentioned Stellantis' factory. Well, it's very likely that the factory will be sold to Leapmotor International. The shareholders on both sides, together with Leapmotor International, were evaluating this project very, very carefully. From Leapmotor and Leapmotor International's perspective, on one hand, our localization strategy in Europe is largely with Stellantis' capacity. We, at the same time, will also acquire some production facilities so that we can have our own production base. We can also have our own production capacity in Europe so that we can introduce our products into European markets faster in the future. For South America, if you look at this year's sales performance, the growth in South America was very fast. You may know that in South American market, Stellantis has very strong presence. South America, you can see that Stellantis has around 30% of the market share in South America. That is why it's growing very fast because Stellantis also value the importance of Leapmotor's business. Since we set our sales in South America, the sales volume has been trending up very fast. At the same time, we are also going to localize the production in Brazil. We want to have localized production facilities in South America as well. Southeast Asia, Indonesia or Malaysia, Thailand, we have been planning our footprint very carefully. Southeast Asia market is very competitive. We're changing our competition strategy so that we can win the competition. Overall, right now for Southeast Asia market, the overall performance has improved largely versus the same period last year. Thank you, Mr. Li. Thank you. We now are taking the next question. Hello, Mr. Li. I am Ming from Merrill Lynch. I have two questions. First, follow-up question of a previous one. Just now we talk about export volume. This year, you can achieve your 150,000 targets. I want to know, in Q1 and in 2026 whole year, in European market, EU market, how much is the revenue going to be like, and what is the price trend? That's first question. Second question is, in the future, will Leapmotor establish a second premium brand? EU revenue. We look at the license registration, registered vehicle. Then plus times ASP. For single vehicle, the revenue change. Well, I can assure you that for our single vehicle revenue versus last year, it's going down. It's easy to understand. It's just like the trend in China with increased penetration of a New Energy Vehicle, with increased supply in the market. This revenue generated from carbon credit will go down. By the end of last year, we were also talking and reaching agreement with Stellantis for this credit business. This business is moving very smoothly. Second question, the second brand premiumization. Mr. Zhu Jiangming and Mrs. Hao recently have disclosed the second brand information because our second brand right now is still confidential. That is why I can only tell you that we do have the plan to have a second brand. It is expected that the product from that new brand will be premiered at the end of this year or no later than the middle of next year. We expect the product launch to be no later than mid of next year or the second half of next year. The positioning of the second brand will be different from the first brand. We hope that this new brand, new products can help the company continue to grow in the future. We now take the next question. Hello, I'm Feng Xiao from CITIC International. Thank you for letting me ask a question. Number 1, cost-wise. Earlier, we talk about some stock-up of raw materials. We now see that memory chips and lithium price has gone up in Q1. I want to know, how long can your stockpile last? At what point, I would say, you will be affected because of the high material price? When can we see the major impact on your GP margin? The second question is still overseas market. This year, because of energy price surge and geopolitical reasons, new energy vehicle exports has been very good, very strong. With your increased sales volume, do you have any plan to really ensure that your overseas sales volume can contribute more to your overall profitability? Yeah. First question. In Q4 last year, we foresee the price surge of raw materials. That is why we have stock up some raw materials. That is why in Q1, the impact on our margin is not very, very obvious. As you said, those stockpile will be used up. The price hike is not ending yet, especially for key materials. This is the background we are now against in Q2. The raw material price hikes and its impact on our profitability will show in Q2. Not that severe impact as we have talked about Q2 margin. In Q3 and Q4, say, if this price hike of lithium carbonate, or memory chip or precious metal, if the price hike continues, then we'll have to say it's going to have a bigger impact on our GP margin. The precondition is our retail price remain unchanged. As you may see that some of our competitors are changing their price. Not adjusting, revising their price. For us, on one hand, for the second half of the year, with the change of geopolitical environment. We will follow the trend very closely to see whether the price will continue to be so high. No one knows. There are so many uncertainties, the war in Middle East and the geopolitical reasons. We'll follow very closely. Secondly, if this trend continues, how should the whole industry cope with the situation? Maybe this whole industry will adjust the price as a whole. I believe if the material price continue to surge, the whole industry will have to adjust the retail price. Therefore, looking into H 2, there are still a lot of uncertainties. We are now following the development very closely. Right now it's very, very difficult for us to give you a precise answer. That is to address your 1st question. Second question, export. When we established Leapmotor International with Stellantis, we have agreed with integrity as a very important part of our business philosophy. We will fulfill our commitment, especially with our partners. We're not going to change any agreement because of changed scenarios. That is one thing, a lot of investors are looking very closely at our profitability in overseas market. Our vehicle margin is not high right now in overseas market. However, I want you to see two possibilities. Number 1, in 2025, Leapmotor International was profitable. On the first full year of establishment, it's profitable. In Q1 2026, Leapmotor International sustained a small profit. There is an impact of foreign exchange rate change. We're also Leapmotor International shareholders, we want the company to be profitable. Secondly, our volume is growing very fast. We have overseas sales outlets of over 1,000. Therefore, from Leapmotor's perspective, we're not investing so tremendously in overseas markets to reach the profitability we have right now. I mean, the capital investment from both sides are not investing so hugely at early stage of Leapmotor International. The result is largely due to sound operation, and brand impact in those markets are also increasing. Therefore, from a CFO's perspective, our investment in overseas market was quite small if you compare the number with our competitors' investment. Therefore, we reached our target at a smaller cost. This, in my opinion, is another kind of profitability. We have agreed partnership models with Stellantis. With our investment, we now have achieved such a big presence, brand impact. If not this kind of partnership, we may have to invest 10x higher than we have and may not reach the same results. If you see this perspective, you can see that the contribution of overseas market to Leapmotor is huge. You all know that for a brand to expand to overseas market, you will have to invest tremendously to develop, educate the market, to build those stores, and also to establish a supply chain, financing services. To establish such a system will take not only time, but also huge amount of capital investment. Therefore, our model with Stellantis allow us to reach the result with minimum investment within the shortest possible period of time. The investment saved in this regard can be regarded as profit. Thank you. We're ready to take the next question. I am Liu Ling. Earlier, Stellantis announcement has been mentioned. I want to ask, Stellantis is going to also increase their production in the European factories. In the future, are you going to make a joint procurement in that factory? What are the parts that will be procured locally? That's first question. The second question is There are several models in overseas market, but now carbon credit ownership is on us. What about the European factory? The carbon credit will belong to Stellantis, maybe. What are the models in European market? Thank you. First question. Our European factory. Stellantis also announced their production plans in the factory. We will share a production line there. Well, for Stellantis brand, which will be manufactured in the factory, Leapmotor will utilize our strength. We will provide electric drive for their model cockpit and some control parts of controllers that were developed in-house from Leapmotor. For our cars and Stellantis cars, when we share a production line, we will establish joint teams so that we will combine our sales targets. Together we will look for the suppliers so that we can achieve the maximum scale effects. We can also get a better price. We also sell some parts to Opel. This model will be launched by the end of 27 and even 28. By 2027 we will start to provide a small amount of parts to the brand. When the mass production started, we will provide in larger quantity, and it's going to have more impact on our overall operation results. Secondly, the carbon credit ownership. According to EU regulation, the ownership is belong to the manufacturer. Those who owns the license will own the carbon credit. Right now for our CBU sales model, our carbon credit belong to Leapmotor because we are the manufacturers. We own the certificate. In European factory or a Madrid factory acquired by Leapmotor International, and then Those cars will be manufactured by Leapmotor International and then the certificate will be Leapmotor International's. They are the manufacturers, the carbon credit belong to Leapmotor International, and the revenue will also go to Leapmotor International. Leapmotor International will trade the credit with the very possibly Stellantis. The revenue, part of the revenue will be used for model promotion or brand promotion. We will also benefit. Thank you. We now are taking the next question. I have two questions from a financial statement perspective. Number 1, the expense in the coming future, carbon credit and non-vehicle business like carbon credit business, how much does that contribute to your overall revenue? First, the financial statement. There's a CNY 7 million gap. It is the result of government subsidy. In our annual announcement last year, and also last year's announcement for the same period, there is this gap of CNY 700 million. From the company perspective, we receive government subsidy, but not that much. This subsidy, and its recognition will take some time. If you compare Q1 last year, the situation was very similar. As for the contribution of carbon credit, well, I have explained our company GP margin and CBU margin has a difference of around 2%. In Q1, excluding the projects, strategic projects with our partner. In last year, we do have revenue in this regard, and this year, with Hongqi, we have the revenue showing in Q1. This cooperation project is going very smoothly. In Q4, the volume production will start. With Stellantis, we also supply parts to them. With FAW Group, we are also talking with each other. It's very likely that in Q2 or Q3 we will have some major announcement. Thank you. For the time being, we will take the final two questions. Next one, please. Hello, Mr. Li. I'm Wang Shi-Hao. I have two questions. Number one, for D19, the sales performance was very good since its launch. It actually exceeds our internal targets. I want to know for D19, the average monthly sales expectation is like, how much? Do you increase that? Do you think that the GP margin of D19 also exceeds your expectation? The second question is for the annual yearly guidance, any changes on that? Because earlier, the annual sales volume is 1 million. I want to know after Q1, do you have any changes on your yearly guidance? First, on D19. Since its launch, the sales performance has exceeded our expectation. 15,000 unit in order within very short time frame. Now the delivery is on the way. After the delivery, the customer's feedbacks are also very good. Customers have spoken highly of this model. The company also has a new requirement on our D19 team. We want to stabilize the annual sales at around 10,000 units so that this can sustain our D-series sales performance, paving the way for D99 model. As for GP margin, if you look at single car or GP margin, there is not so much change. Similar to our plan and the previous expectation, for the sales increase and the total increased number in our mix, it is going to have a very positive impact on the overall profitability. We're expecting that, we're also very confident to see stabilized sales volume of around 10,000 units. D99 has also attracted a lot of attention. We have reason to be optimistic about C99. 2nd question is our yearly guidance. In terms of sales volume, in Q2, the sales volume is around 250,000. In H1, we can finish our 360,000 H1 target. This is in line with our yearly targets. Now, if you look at policy, regulation, the seasonality of this industry from new energy vehicle perspective, normally, H1's sales volume is weaker, H2 will be stronger. In H1, 36%. In H2, 64%. That's the sales target. We believe that we are very confident to realize this 1 million sales target. As for profit target. Earlier, we talk about the impact of raw materials on our profitability. In second half of the year, we don't know the eventual trend of the raw materials, and we are still not sure the price trend in the whole market. There are too many uncertainties at this moment. From the company's perspective, we think that this CNY 5 billion profit target is possible to be achieved, but we will also admit that there are some potential risks. We will have to follow the trend very closely. There are so many variables here. It can be raw material, can be geopolitical environment, it can also be impact from the auto market. Right now, it is not easy for us to have a very clear prediction. We do not have any plan to revise our CNY 5 billion profit target, but we think that there is risk. Thank you. Very clear. We take the question from the next investor. I'm with Huatai Securities. I'm Gu Ning. Two questions. First is the facelift of C-series. What are the timeline? What will be the changes? Second question is, overseas sales guidance in Q2. Maybe you can walk us through that. For C-series facelift You asked about the major changes and what are the differences. What I can tell you now is, for C16 and Well, that's a mid-phase facelift. For C11 versus C16, the changes may not be that dramatic. C16 and C10 will have more dramatic changes because it's a mid-phase facelift. The product competitiveness will improve. I'm not in the position to disclose any more on any specific changes. This is what I can tell. C10 and C16, mid-phase, major facelift, but C11 is more moderate. In June, we're going to finish the facelift and launch the product. It's already May, so very, very soon, in around a month, you will know the results. Please stay tuned. Our marketing management, Mr. Xu, will give you very, very detailed introduction. The second question for overseas sales target in Q2. In April, it's exceeds 14,000. If you look at the whole Q2, the sales is around 40,000-50,000. If we do well enough, it's gonna exceed 50,000. Leapmotor International placed bigger orders than these numbers, but I think it all depends on the international shipping. We are trying to work out more ways to get this shipping more smoothly. Only when we can break this bottleneck can we realize this sales volume. Thank you. Thank you, all the management, and thank you for all the investors. If you have any other questions, please reach out to the IR team of Leapmotor. This is the end of this conference call. Thank you for joining us. See you next time.