(Yicai) March 26 -- Shares of Leapmotor Technology advanced after the Chinese new energy vehicle startup narrowed its net loss and reported its first-ever positive gross profit margin last year.

Leapmotor [HKG: 9863] was trading up 6.5 percent at HKD25.40 (USD3.25) as of lunch break in Hong Kong today, after earlier gaining as much as 12 percent.

Net loss shrank nearly 18 percent to CNY4.2 billion (USD582 million) in the 12 months ended Dec. 31 from the year before, thanks to better product mix, lower costs, and improved efficiency, the Hangzhou-based company announced yesterday in its latest annual earnings report.

Leapmotor’s gross profit margin was 0.5 percent last year, a significant improvement from minus 15.4 percent the previous year, the carmaker added, noting that the figure is expected to further improve this year.

Revenue surged 35 percent to CNY16.7 billion (USD2.3 billion) in the period, mainly thanks to higher product prices and larger sales volume, Leapmotor said. Research and development expenses rose 36 percent to CNY1.9 billion.

Leapmotor delivered 144,200 NEVs last year, up 30 percent from the year before. In the first two months of this year, deliveries totaled 18,800 units.

Leapmotor’s cost advantages benefited from the company’s technological advantages of full-field self-research, which refers to its independent research, development, and manufacturing of three electric systems, including power battery, motor, electronic control, intelligent car cockpit, and intelligent driving, which account for about 60 percent of the total materials cost of a vehicle.

The firm is negotiating with other carmakers for the external supply of core components for these three electric systems, trying to enter their supply chains, it pointed out. This will be Leapmotor’s third important strategy following the full-field self-research to control costs and the light asset cooperation with overseas partners.

Editor: Futura Costaglione