Shares of Zhejiang Leapmotor Technology fell 7.3% to HK$39.66 on Tuesday, erasing gains from a strong first-half performance after the company reduced its full-year 2026 net income guidance by approximately 40%. The decline followed a Monday selloff triggered by a safety recall of more than 4 million vehicles by Chinese EV manufacturers, including Leapmotor, due to door-related issues.
The Hang Seng Index slipped 0.3% alongside broader technology sector losses. Leapmotor reported a 57% year-over-year increase in first-half revenue to HK$27.8 billion, while net income surged over 530% to HK$2.1 billion. Deliveries reached a record 356,487 units in the first half, up 60.8% from the same period last year, and international exports more than quadrupled.
Despite the operational strength, the company’s gross margin narrowed from 14.1% in the first half of 2025 to 11.7% in the first half of 2026, reflecting rising raw material costs. Leapmotor attributed the reduced 2026 guidance to these cost pressures and margin compression, overshadowing its otherwise robust financial results.
