Zhejiang Leapmotor Technology (SEHK:9863) Could Be 40% Undervalued If Margin Gains Hold

August 16, 2026 - 17:09

Zhejiang Leapmotor Technology (SEHK:9863) is getting a fresh look from investors after a stretch of uneven trading. The stock last closed at HK$40.06, and while the past week brought a gain of 2.51 percent, the 30-day return sits at a more solid 7.57 percent. That mixed short-term picture has left some market watchers asking whether the company's recent moves are just noise or the start of something bigger.

The core argument for a potential upside comes down to margins. Leapmotor has been pushing to improve its cost structure and production efficiency, and early signs suggest those efforts are starting to pay off. If the company can hold onto those margin gains, the stock could be trading about 40 percent below what a fair value estimate would suggest. That is a big gap, and it hinges on whether the improvement is durable or just a one-off bump.

There are still risks. The electric vehicle market in China is brutally competitive, with price cuts and new models constantly pressuring profitability. Leapmotor's ability to keep margins up while scaling production will be tested. But for now, the numbers point to a company that may be underpriced relative to its own improving fundamentals. Investors will be watching the next earnings report closely to see if the trend holds.