Dahua-Created Leap Motor's IPO And Negative Gross Margins Analyzed

** *** ***** ** ***** ******, Dahua-created ******** *** ************ ********* (*** *** **** ******** ********) *** ********* ******** ***** *******, i.e., **** **** ***** ** **** car **** ****, ***** ** ****** irregular ** **** *****.

*******, ***** ** **** **** **** boomed. ** **** ****, ** ******* their *****, *** ******** ***** *******, the ********* *** *** ***, ****'* potential ** *** ******** *** ******, and *** ******** ****** ** *****'* now ****** ***** ************ ********.

Leapmotor **********

*********, ******* ** **** *** **** 2021 ******** ** ~$****,********* ******** * "******* ***** ** ******* based ** ***** **** ******* ** deliver *** ****** ***** ******** ********** to *** *********" (*.*. ****** ** capture *** ****** *** ***** *** of *** ******).

** ** ********* ***** ** *** in **** ****, ****** ** *****$* ********** ***** ******* ** ********* **,****** *** ****** *** ***** ** $* to $* *******, *** *************.

Dahua *******

********* ** ********** **** ** *****, having **** ******* ** ***** **-******** Fu ****** *** *** *********, **** Zhu ********* ****** ** *********'* ***. Currently, **.**% ** ********* ** ***** by ** *** ** ***** **** their *****, * ***** ********* ** decrease ******** ** **.**% ***** *** IPO; ***** ****** **** ******* *.**%, projected ** ******** ** *.**% ***** the *** (*** ******* ********* ** Leapmotor's**********).

Sales ********

*** *** ** *** *****'* ******* electric ******* ******, **** ** ********* ~3 ******* ******** ************ ** ************* ** *** ***** ********* *** Association (******** ** ***,****** *** ***** *.* ********** ******). *****'* ****** ** ********* ** SAIC, ***, *** ***** ***** ***** sold***,***, "****** ***,***", ******,****** ** **** ************.

********* ** ******* ** **** *** scale ** *****'* ***** ********-******, **-**** ("Pure ****") *************:*****,** ****, ******. ******** ** ***** ***** *******, Leapmotor ****** ****** ** ***** ** cars **** ** ** ** **** with **,*** **********:

*** *** ****, ** ******** ** the ***** ****-**** ** *********, ***** mostly **** *********** ***-******** **** *** do *** ********* ***** **** ** sales.

Negative ***** ******

***** ****** ***** *** ********** ******* the ***'* ******* ***** *** *** much ** ***** ** *********** (*.*. steel, *****, *****, ****** ******* ***** costs, ***). ********* ** ******** ** that *** ***** ******* ****** ******** negative, ********** -**.**% ***** ******* *** Q1 **** *.*. *** ****** **** for ***~$**** ** ******* *** ~$**** to ***** *** *************:

*******, *********'* ****** **** *** ***** of ******** ******* ***** *** ***** around **-**%, **** ** ** ** points ****** **** ****:

*********'* ***** ******* *** *********, **** -95.7% ** **** ** -**.**% *** Q1 ****.

"The **** *** ****, *** **** *** ****"

*********'* ***** ******* **** ********* ******** attention ** *** ***, **** *** blogger********** "** *** ******, ********* ** still ***** **** '*** **** *** sell, *** **** *** ****'":

** *******, ********* ** *****stuck ** *** *** *** ** "*** **** *** ****, *** **** *** ****" and its self-restoration capability has not yet formed. The prospectus shows that Leaprun’s 2019-2021 revenue was 117 million yuan [$23m], 631 million yuan [$89m] and 3.132 billion yuan [$442m] respectively, but the high cost of sales caused its gross profit margin to be almost all negative, which were -95.7%, -50.6% and -44.3% respectively. Based on this, its losses over the years are 731 million yuan [$103m], 870 million yuan [$123m] and 2.89 billion yuan respectively [$408m], which isnot * ***** ****** ** *** ******* new EV market. [emphasis added]

***** * ***** ** **** ************ "*** ** [*********] ***** ******* to ***?"**** ** ***** ** **** *******:

**** * ********* ** ** ******* that **** ***** *** ***** ** go *:*****, ** ****** *** **** surprised, *** *** ***** ********, "**** Motorlost **** **** *** *******, why is it still allowed to IPO?" [emphasis added]

Leapmotor ****** ******* *** ***** ********** *****

** *************, ********* ********** *** ******** ***** margins ** ***** ********** ****** *** raw ********* ***** ******** *** *** batteries:

*** ***** ** ***** *** *** parts **** ** *** ***** *****. While ** *********** *********** ******** ****** during *** ***** ****** ******, ** incurred ***** ****** ********** *** ***** Record ****** ********* *** ** *** high **** ** ***** ** *** early ********** ***** ****** ***** ** were ** ***process ** ******* ** *** ********** *** ********** ** ******* ********* ** *****. Our gross loss increased from RMB112.0 million in 2019 to RMB319.6 million in 2020, and further to RMB1,387.6 million in 2021. Our gross loss increased from RMB137.4 million for the three months ended March 31, 2021 toRMB529.5 million for the same period in 2022. The increase of gross loss during the Track Record Period was mainly attributable to the increase in the number of vehicles sold throughout the Track Record Period, as the cost of sales was relatively high due tothe *********** **** ** *** ********* ** ******** ** *** *********** ** ********* for our vehicles. [emphasis added]

********* ***** **** *** ***** ******* are ********* (****** ***** ********), *******: "We ****** *** ***** ****** **** further ******* ** ** ******** ** manage ***** *** ******* *********** ********** as ** *******".

Potential ** ******

*********'* **** ** ******** ******* ** made **** ********* ** *** *** price ** *** *** ******* *** in ** ****,*** *** '**** ***', ***** **** ** ****** */* units **** *** ******* *** **** 79,500 **** *.*. $**,*** (********* *** not ******** **** ** ***** *** any ******** ***** ** *** ***** margin *** **** *** ** *******):

**** ** ** ***** ******** ** Leapmotor's ****-**** ******, ***** ***** ** the ****** ** ****** ***. *** example, *** ****-******* ***** ** ** Auto,** ***, ***** *** $**,*** ***** ***** China's **** ******* *****, ******** *, ***** ** ** $**,***. *********, Leap *****'* ******* ***** *******,*** ***, ****** ** ***** **** $**,***-$**,*** but ***** ******* *** * ****** over */* ** ***** ****.

** *************, ********* ****** ** **** "******* penetrate *** ***- ** ****-*** ******* in *****’* *** [*** ******** *******] market" ** ********* ***** *** *** [battery ******** *******] ****** ** ****, at * **** ** *** ** three ****** ***** **** ******** ******, SUVs, *** **** ** ******* *****".

Claims **** **** ***** ** ****

********* *** **** **** **** ********* promises, **** *** *** ***************** **** ******** ** ***** ******* ***** ** China ***** ** **** **** ***,*** deliveries *** ****, ***** ************ *** *** ****** ** "******* and ****".

**********, **** ** *********'* ****** ************* hinges ** ******* ** *** ************ manufacture *** **** ***, ******-*** ******.

Dahua ***** ************ ******** ******

** ****'* *** ** ********** *** it *** ***** ****** ******* ** selling **** ** ******-*** ******, ** might **** ******** ************ *** *****, causing ** ** **** ***** ** video ************. *****'* ***** ** **** heavily **** *** **** **** *****:

*****'* ***** ** *** **** ** levels *** ***** ******** * ***** ago, ******* *** ******* ********* **** become ** *****:

** *** *** ***** ** ****** much ******** ******** *** ********* ** unable ** *** *** ******** ***** margins, ********* *** ***** **** ** a *********** *** *****, ****** ** with * ********* ********** ***** *****.