Those forward-looking statements may be different. We remind all participants not to place undue reliance on the forward-looking statements discussed in this call. This discussion reflects the management's view only as of today, and the company has no obligation to update or revise them in light of new information, future events, or other circumstances. The forward-looking events discussed may not occur due to various uncertainties and assumptions. Will this disclaimer apply to all the forward-looking statements mentioned in this call? I remind all shareholders and potential investors not to treat this earnings call as constituting investment advice, nor that it forms the basis of any contract, commitment, or investment decision. Please exercise independent judgment and caution when trading the company's shares. Thank you. Next, inviting Li Tengfei to share the company's performance in the quarter three of 2025.
Good afternoon, I'm Li Tengfei. Next, I would like to report our performance in quarter three. The net profit is CNY 160 million, and it outcomes CNY 180 million compared to the first three quarters. In Q3, our gross profit margin is 14.5%, upper 0.9 percentage point. In Q3, our delivery volume reached 170,000, and we've been the top one in Chinese news for 34, 8 months, and we are the only Chinese news force brand that delivered over 70,000 units for many months consecutively. Our CNY revenue is CNY 19.454 billion yuan. Year-on-year growth of 96.3% is mainly contributed by the whole vehicle delivery and the parcel delivery. In Q3, our gross profit margin is about 14.5%, the year-on-year increase of about 8%, and compared with the 13.6% in Q2, it's a significant improvement.
In Q3, the net profit attributed to equity holders of the company was CNY 150 million, compared with a loss of CNY 690 million in the same period of 2024. The year-on-year increase in profit was mainly due to the increase in vehicle sales and the optimization of per unit revenue capacity. The company generated cash flow of CNY 4.88 billion from operating activities in the third quarter, and the cash flow was CNY 3.84 billion, and the company has ample funds on hand. As of September 2025, cash and cash equivalents were restricted, including financial assets measured at fair value through profit or loss. In Q3 2025, the company's sales reached 173,000 units, a year-on-year increase of 101%, and month-on-month increase of about 29%. The company's sales volume jumped consecutively in the third quarter, reaching about 51,219 units in July. In August, there were 57,000 units sold.
In September, it reached 66,657 units. In October, monthly sales exceeded 70,000 for the first time, reaching 72,890 units. Year-on-year growth of 84% ranking first in sales for eight consecutive months, and as of the first, it's the first new force company to launch a model with over 70,000 monthly sales. It's accumulated sales of 8,200,000 units in 18 months. Among them, in the third quarter of 2025, the average monthly sales volume reached 15,000 units. In October alone, the monthly sales volume of station exceeded 20,000 units, making it the first product to reach a monthly sales volume of over 200,000 units. The model achieved explosive sales upon launch with deliveries for three consecutive months. As of October 31st, the accumulated sales exceeded 64,000 units, and they have also achieved remarkable results with monthly sales exceeding 10,000 units.
On September 26th, we led the way in welcoming the historic moment of 1 million units of completed vehicles being unrolled off the production line. It took less than one year from the 500,000 units to 1 million units. This milestone not only echoes the company's rapid development, but also simplifies our business effort to have reached a new level. On November 15th, the company completed its annual sales target of 500,000 units, and half a month ahead of schedule. It's expected that annual sales volume will exceed 600,000 units since its launch in 2021. The C11 has accumulated sales of about 300,000 units. It has become a market-prominent level product in SUV segment.
On July 10th, the C11 was launched on a new market date, achieving a comprehensive upgrade in shining carbon, injury carbon design, and assistance driving and control safety, further consolidating this benchmark position of the C11 model in the mid-size SUV market. In October alone, the monthly sales volume exceeded 11,000 units, and the C01 model is positioned as a high-intelligence design and was launched on July 24th. This historic co-element of leading brand intelligence, comfort, and safety are our core technologies. Based on the Leapmotor LEAP 3.5 architecture, it adopts a combination solution of Qualcomm 8650 chips and Qualcomm 8295 intelligent chips. We support multiple ADAS functions with a spacious design and comfortable feature reaching an 86-point high accuracy rate.
The interior is environmentally friendly and healthy with a six vertical dragon-shaped body for safety and 48-hour thermal runaway protection equipped with a chassis jointly developed by China and Europe. With the launch in April 2019, C01 has seen its monthly sales exceed 10,000 units since its launch. The all-round and fully equipped hexagon wheel well has penetrated into the A-class sedan market. Leapmotor, on the 8th of September, made its debut at the Munich Motor Show, officially opening a new chapter. Our LEAP3.5 technology architecture is a flagship intelligence platform with outstanding European-style driving control and top-notch quality. It pre-sold on November 7th and officially launched in China on November 27th with a global market entry plan for the second quarter of 2026. Looking ahead , the D19 will make its debut in Shanghai, attracting more market attention than expected.
As the first model of the flagship E-platform, the D19 is centered around creating the ultimate premium with the top-tier segment, bringing medium-door technology and experience to the CNY 300,000 market. From the flagship range, intelligent driving control to safety, comfort, and effective leadership, the D19 reshapes the value standard for four-size luxury SUV in the CNY 300,000 segment, truly making luxury accessible. The first model of the E-Series, A10, will be unveiled at Guangdong Auto Show on November 21st, positioned as an intelligent premium long-range SUV. The A10 brings laser radar and other exclusive performance and premium within CNY 100,000 for the first time. Aiming to reshape the competitive landscape of mainstream two-meter vehicles, becoming a new benchmark for global compact SUV, we offer an attractive design philosophy and affordable price.
With the launch of the C-Series and E-Series, we will complete the comprehensive layout of A, B, C, D4 series, covering multiple market categories such as sedan SUV and be a complete product matrix. In terms of CNY, six new flagship technologies were released on October 16th. The first enterprise loyalty enhancement version equipped with a large battery capable of delivering 500 km of pure electric range at a degree of about 30 degrees. The vehicle innovatively adopts an intelligent four-wheel drive extended range system with the first launch of a flagship model powered by pure electricity at 1,000 V. It features a 5,110 Wh super hybrid battery pack and 1,000-V three-phase power system throughout the vehicle. It is also equipped with the dual-core code 8797 chips, offering 1,280 TOPS computing power enabling ADAS assistance driving.
The observation and it's equipped with a flagship architecture with the 2.0 system, featuring high-speed dual-wheel tires and stable 6-m level original radial tire. It's more functional, and it's not only featured high-strength steering wheel, 10 layers of battery, safety protection, and other configurations. It also offers six flagship comfort features such as the leather seat and 120-degree zero power seat. It's also the first time in the industry to integrate a vehicle-grade oxygen generator into the car. In 2025, in our summer test, we completed and passed over 2,900 various tests. It covers key items such as the charging seat in extremely hot environment, clean performance of high-temperature air conditioners, extreme temperature 100-km acceleration capacity, and extreme temperature explosion resistance parameters.
Under conditions of high temperature and complex conditions, the cumulative test mileage has reached 1.15 million km, truly reproducing the user's driving scenarios in extremely hot environments and comprehensively verifying environments. Since 2025, the company has brought leading-edge technologies to new users and upgraded five models. Over 50 features have been added and optimized, including community navigation, auxiliary images, roadside driving recorders, etc. We also offer many other advanced capacities such as community navigation, assistive aids, imaging, road show detection, and more. The 2021 model and other older models of the C11 and C01 series have undergone the 408 OTA upgrades, adding and optimizing nearly 20 features, including mobile phone integration, Bluetooth. Key strategy. In terms of sales, as of September 30th, 2025, the company's sales service network has powered 292 cities and increased compared to the same period last year.
A total of 866 sales stores and 493 service stores have been deployed. In terms of channel development, we have focused on introducing and extending high-quality resources relying on previous plans for cultivating high-quality investors and newly introduced areas. From January to September 2025, our state operators and local strong players jointly established 120 resources, significantly driving improvements in skill and quality of their distribution channels. Year-on-year, it grows with about 30% in retail in the first half of the year. Based on the folding digital marketing and service system of the previous year, the third quarter continued to deepen, and the user-centered integrated operations system achieved significant improvements. In terms of user efficiency and conversion quality, to ensure seamless integration from online investment to offline experience, it provides users with an integrated and valuable brand experience.
Our onsite test drive rate for the entire fleet has increased by 8.4 percentage points. In terms of service in 2025, the company continues to implement the service concept of fully equipped and to safe in vehicle maintenance, relying on our globally developed technological advance. We have launched the intelligent cloud diagnosis, providing proactive services to achieve full diagnosis within seconds and pre-service preparation. Sales volume increased by 4.8 percentage points. In terms of spare parts supply, by establishing a 1- plus- 7 warehouse distribution network and applying an intelligent inventory for custom model, the 48-hour delivery rate was increased to about 92% year-on-year, an increase of 25 percentage points. In terms of globalization, we exported a total of about 117,397 units in the third quarter, with accumulated exports from January to September reaching about 33,000 units, leading the new four-fifth segment with the shipment volume.
In September, it took the lead in the automotive market in several European countries such as Germany, Italy, and France, ranking among the top three in terms of sales volume for Chinese new energy brands. In October, the number of overseas and customer-signed contracts increased by over 100% compared to September, as of September 30, leading with that the international market. Over 700 allies with both sales and after-sales services functions have been established in international markets in about 30 countries, including Europe, Middle East, Africa, and Asia-Pacific. Among them, D10 has already gone public. In Europe, in October, over 1,000 European users placed orders, and the company accelerated the global localization efforts in 2026 with the first introduced D10. In H2, in September, the leading automotive circular manufacturing center was officially launched and put into operation. The center effectively reduced resources consumption and carbon emissions.
Okay, next is the Q&A. Hello, I am the host for today's session. I'm the analyst from CITIC CLSA. I have two questions. This year, we've seen that our cumulative delivery is leading the market as it exceeded 500,000 units, achieving our targets for 2025 ahead of schedule. If we look ahead to the next year, what new products will we launch? Which existing products will be further enhanced to strengthen our capacity? My second question is about overseas. In 2025, we saw a concurrent increase in the penetration rate of the new energy vehicles in Europe. The company's sales volume of the exports this year has also been very impressive. I would like to ask whether the growth trends in exports can continue in 2026. Next year, what's the company's sales targets for overseas markets, including the sales guidance and profit targets? There are many.
Thank you. As you can see, we have launched a new product in 2026. In fact, one of them has already made its debut, which is our C-platform developed first model on the C-Series and is the largest deal product. Another product launched in 2026. These are two products for the C-Series we will introduce in 2026. I mentioned that we will launch the first product of our A-platform, the A10. That also will be another flagship product next year. A10 will be launched in the first half of next year, in 2026. Our A-platform in A-Series will also be A5. The A5 model will also be launched in 2026. Next year, we will have two new A-Series products. We also have new products in the series. All new products will be launched very soon.
From the perspective of new products, 2026 is the year that we'll see leading products emerge. Existing products, which is our current C-Series, C16, C10, and C11, and C-Series, C10, and D01, or the new products will be launched at the end of this month. There will be upgrades to existing products and the emergence of new products. These products will further enhance our capacity. The second question, our overseas sales, as I mentioned, overseas sales in quarter three saw a significant increase compared to second quarter. Very pleased to inform that we achieved overseas sales in October and in November, and we've seen explosive growth. In October, our overseas sales order reached 12,000 units.
In November, we expect an order to exceed 15,000 units as we roll out our entire B10 platform and continue to build new brand awareness in Europe, whether it is the continent as a whole or the individual regions. After users become familiar with the B10 and after our product launch, we will continue to achieve better sales. Looking ahead to 2026, we believe that based on the good momentum right now, we will continue to make big strides and we have seen progress in new markets such as countries in South Africa and the gradual rollout of new products in other countries such as Middle East and Central Asia will also give us new momentum. In the fourth quarter of this year, we expect a high-speed growth. That is because we expect the company's current sales target for overseas markets should be between 100,000 and 150,000 units.
That's our projection for the next expectation for next year.
Okay, thank you. Hello, my question. I'm sending an analysis from the company. I would like to ask also two questions. The first question is about the confidentiality of the models on our B-Series projectors. Give me an outlook of this. After the launch of B-Series, will there be any changes in our marketing and channel strategy? Is that a more distinctive and innovative approach, whether it will reflect the high-end attributes of our platform? That's my second question. My second question is about the overseas platform and the plan next year. Can the progress of our domestic market help us to go out? Regarding the volume, we always have doubts about the entire overseas profitability. Could you share with us more insights on those regards?
Thanks for your question. The first question regarding our gross profit margin. As I mentioned, our company aims to maintain the gross profit margin of complete vehicle products of about 15%. As we enter the high-end market, we want to achieve a higher gross profit margin for the C-Series since products are currently priced higher than the existing Leapmotor model. We are not aiming for an even higher gross profit margin. Now we want to maintain it at 15%. This level will fluctuate according to the market conditions and the overall type of the vehicle. Regarding the overall gross profit margin, we are considering how to finalize the level. Our responsible person stated that our leadership and management will always adhere to a high benchmark pricing, but we do not pursue particularly high gross profit margin for products with such attributes based on our current estimation.
The gross profit margin will range between 15%-20%. As to how to build our B-platform, by far, we've seen that the performance of the service fees is excellent since we've launched it in the Shanghai Auto Show. It is very successful, and we also invite [audio distortion] to be our representative. By far, it has reached great success. Both with the industry and among our user community, [audio distortion] pioneering collaboration has received a high level of attention, and that is an innovative manifestation on the B-Series, which we also understand to be our most advanced and most expensive product at present. Whether it is the brand promotion, channel strategy, or the end-to-end process, we always have some ideas and approaches that go beyond and exceed what is currently on sale. That enables us to connect with the users.
Okay. I would like to ask, what's your outlook for profitability for overseas operation in 2026?
We will have about two overseas projects to be realized in 2026. One project will be in Malaysia. It is expected that in the first half of 2026, this localization project team will be set up. Our project in Malaysia will start with C10. In Europe, we will also launch a localization product to start with the B-Series models. Whether it is in Europe or in Malaysia, it will help us to further develop. We have made plans about what kind of models should be exported to the two different markets in terms of our overseas profitability in 2026. Friends who are familiar with Leapmotor may know that we've made a three-year commitment to our international market.
In the first three years of going global, we will maintain a relatively low gross profit margin. That is why we want to expand the international market first. In 2026, our overseas gross profit margin will be very similar to the margin this year. Okay, thank you very much. I hope that this model will achieve greater success and better performance.
Let's welcome the user with the ending number 2110 to ask questions. Okay, thank you very much. I have two questions. First, the new energy tax has been reduced to 5%. Subsidies, the trading subsidies for new energy vehicles also got reduced. In the segment of vehicles priced around CNY 200,000, users are generally sensitive to subsidies. I would like to know how you would adjust to these changes to maintain or to reach your target of 1 million domestic users.
I would like to ask in the future whether you will focus on the domestic or the overseas market. You also mentioned in the overseas market when you will launch your first model. You mentioned changes in the whole industry. It is expected that next year there will be changes such as changes in the subsidies, in purchase tax, etc.
At this point, we should not see for sure how changes will look like next year. On the other hand, from my perspective, I do not think there will be significant changes next year. Next year in China, I believe that the overall sales in urban areas would not fluctuate significantly compared to this year. We can refer to the situation in 2022 and in 2023. In 2023, the national subsidies also changed. It is said that gradually national subsidies will be phased out.
The number of total sales has not changed significantly compared to 2020 in China. As the Chinese new energy vehicle develops significantly and rapidly, whether there are subsidies or not, Chinese new vehicles will go global, and users will need it, will purchase it. When all products are put together, it is fair for us to compete. In the long run, I think what matters is how to turn customers' demand into real sales. At Leapmotor, we will closely follow up with the latest policy changes and closely monitor our competitors' measures. We will launch coping strategies. On one hand, we want to improve our own products to optimize our configuration and advance our technologies and to develop our full series advantages. That is how we can maintain our competitiveness. We do not have many concerns whether we can achieve the 1 million sales target.
We think we are confident that this 1 million sales target can be realized by us next year. At Leapmotor, we will make all efforts to realize this 1 million sales target. Since we already told the market our sales target, next year is 1 million. We have no room of turning back. We have to achieve it. You also mentioned our cooperation. Actually, this March, we announced a memorandum of understanding with our partners. The overseas model is expected to be launched in the second half of next year. Mass production and sales will follow up after that. The two parties now are currently working together, advancing the progress of the new models. We rely on each other's strength to offset weaknesses and to overcome difficulties together. Whether it is in China or in overseas markets, I believe the market is sufficient.
As a new fourth-car company, Leapmotor has these overall advantages, but it also faces challenges. We need to learn from traditional car makers. By working with FAW Group, we can learn from a traditional state-owned company. They have strength in technology, in R&D, production, in creation, and supply chain. By working with FAW Group, they can achieve joint progress. Now we've conducted in-depth exchanges and communications on many areas. I believe that it's a good start. Very soon, you will see our cooperation results.
Okay, thank you very much. Next, the user with the ending number 5006, you can ask questions. Hello, I'm the car analyst from Minsheng Securities. I have two questions. The first question is, could you share more of your sales in Europe in quarter three? What's your sales revenue in Europe in quarter three?
The first model has been sold very well in Europe, and your sales are likely to continue to expand. How do you expect the European markets to increase? Okay. In quarter three, as we mentioned, we work with the philanthropy. In Europe, we will have revenues from carbon credits. We have revenues from carbon credits in quarter three. The number is about CNY 250 million. It is expected that this quarter four, this figure for quarter four, will be even higher because we expect the overall sales volume in quarter four will be greater than that in quarter three. The carbon credits are directly linked with our sales and with our revenues. It is expected that in quarter four, the revenue caused by carbon credits will be about CNY 500 million. Your second question is about inventory in Europe.
Basically, our inventory is in line with the overall order. Our dealers' inventory is currently very low. By the end of October, I just finished the meeting this afternoon. We are working with our dealers to see how we can further reduce the inventory too. Right now, the dealer's inventory is only between 1,000-1,500 units. Regarding our models with exports, there are also impacts on transients, including maritime transients and the customs clearance and many other issues. Overall, the inventory in Europe is quite low.
Okay. A follow-up question. Since the electronic parts from upstream have become more and more expensive and we've seen the tight supply chain, do you negotiate with the battery supplier to see if they can give us a certain discount? And whether that will impact our gross profit margin in 2026?
Yes, the raw materials for battery have become more and more expensive. I also heard about that from the media. We also talked with our suppliers and the leaders. According to the feedback from our suppliers, the price of the battery raw material fluctuates slightly, not significantly. This would not have a significant impact on the procurement price of the entire battery sales. As Leapmotor's sales volume continues to increase and we have the scientific planning for the battery sales, we have a greater variety of battery sales. Overall, our chip and battery platforms are developed very well. Therefore, although our sales volume for this year is expected to be around 600,000 units, actually, the variety of our battery sales is much smaller than that of our competitors. Since the variety of our battery sales is low, it is good for our suppliers to produce and to supply.
That's very good news for our battery suppliers. We expect that the battery production line will be operating at a slow speed. The capacity would not be our concern. We also have the manufacturing cost advantage in batteries. On the basis of this year's good foundation, the overall cost of battery is expected to be even lower next year.
Okay. Next, the customer with the ending number 9915, you can ask questions. Thanks very much. [audio distortion] from Tianhai Auto analyst I have several questions. You mentioned, maybe I heard it not correctly, but I remember you mentioned your income from carbon credits is about CNY 250 million . I would like to ask, are there any other types of income, for instance, the revenue by authorizing or licensing to FAW?
The second question is, your R&D expense, in which area you will further develop R&D and invest your R&D expense? The third question is, in the pure electric vehicle market, your competitors also launched very economically friendly and cost-competitive EVs. I would like to ask, next year, how would you compete with them?
Okay. Your first question, in quarter three, in addition to revenue from carbon credits, we do not have revenues from other resources or from other business. For your second question about our R&D expense, we will mainly focus on, first, the electric motor batteries and the electronics. I could not tell too much detail about where we invest in terms of R&D. I would like to invite you to experience our latest benchmark development and to experience our racket. We also invest in new products.
Next year, we will launch four new products. In 2027, we will also have new products. Each year, we invest a lot to modify the existing products and to launch new products. That is mainly where our R&D investment goes. First, we will invest in future technologies and to reverse the future-oriented technologies, especially technologies related to intelligent driving in high-tech electronics. We want to have fully self-developed technologies. We want to upgrade the Leapmotor Platform 3.5 to four or even higher versions. That also requires a large amount of R&D investment. The scale and depth of our R&D also got expanded. As to your third question, that is related to industrial competition. For instance, what is Leapmotor's competition strategy? As you mentioned, the new energy market is now quite competitive. At Leapmotor, we also built the fierce competition from the whole industry.
From the beginning to today, Leapmotor has got used to such fierce competition. If we do not face a promising market, so do our competitors. What we should do is to focus on ourselves to improve our own products in the long run. Only when we can have full, fully self-developed technologies and the full self-stack, we can control costs and can really establish outstanding capacities compared to our competitors. We will have a better platform-based capacity, and we will be able to roll out new technologies and apply them in our products. We want to offer the most cost-effective product, the product that offers the best value for money. Whether it is our A-Series or the most premium B-Series, our attitude is always the same, which is to leverage our competitive advantages in cost-effectiveness and to leverage technologies and uses in our full-series models.
Our advantages in cost and in efficiency will continue to create high-value products. Our principle, as always, whether it's our A-Series, B-Series, C or D-Series, we face fierce competition. Our competition strategy will be flexible according to the specific market conditions. We will adopt a more targeted approach based on different user groups in our respective markets. Overall, we want to benefit our users. Leapmotor's users will feel our sincerity whether they buy our products priced at CNY 100,000 or priced at CNY 300,000. All of them, all of our users can feel Leapmotor is sincere. Leapmotor is developing products from the bottom of our heart.
Okay. Thank you. Dongwu Zhenzhen from Dongwu Zhenzhen. This question is about the management fee. Whether the management fee will increase year- on- year or quarter- on- quarter.
The answer is the management fee will increase as normal, but there would not be a significant increase. Your second question is about our profitability in quarter four. I feel overall the profitability will be very similar to that in quarter three. We hope that by the end of the year, the sales will increase significantly. As local subsidies continue to be phased out, the market is still wait and see. Companies will launch related strategies to deal with this. Overall, in quarter four, we expect to maintain a similar profitability as quarter three.
Okay. Thank you. Next, the investor with the ending number 7074, please tell your name. Hello. I am Liu Ling from Goshen Overseas Investment Team. My first question is, on your investment day this year, you said your R&D expense will increase. Could you share more about your new products and how those new models or products have been developed? Your sales target next year is 1 million. I would like to ask internally, how did you set this target? Did you divide it into different segments?
Okay. As to your first question about the new models, we finished the strategic planning for new models. We have clear directions for products for our brands and for our sales channels. Right now, we are setting new teams for new models. Products are under development. Sorry, I could not release too much information about a new model. This new model is totally different from all the available models in the market. I mean, it is brand new. It is totally different from all models domestically or overseas. It is different from all the available products in the market.
From the perspective of Leapmotor, it's a really innovative product. It has pioneered a new category. We call it the new species. You can look forward to it. It's expected this new product will be launched in 2026 or 2027 or 2028. In terms of the breakdown of sales volume, I don't have the specific number on hand. It's related to the overall launch of models in China and overseas. I'm sorry that I don't have too much detail or I don't have detailed breakdown of sales at hand.
Okay. The investor with the phone number ending in 0521. Hello. I have two questions. First is about internal competition. We have policy changes such as the reduction of national subsidies. Next year, it's expected competition will be very fierce. Would you have policies to reduce cost and to reduce the supply chain cost to be profitable? How would you be flexible and dynamic to the national policy changes? The second question is about the overseas markets. Right now, I see that new energy has increased significantly in Europe, and you are working with Stellantis. I would like to ask whether, since the management in Stellantis has changed, it will impact your cooperation.
Your first question is about the trading policy and the tax. Our competitors said that they have policies for the trading subsidy only for this year, not for next year. From our perspective, we are confident that we will have scientific and reasonable sales, and the dealer's inventory will also be reduced considerably. In December, the total in December, we will deliver more finished cars to the end users.
This year, we will introduce similar measures for our users to deal with the trading policy changes. Overall, we do not concern too much on this issue. Your second question also, in China, at the national level, actually, the low price and the fierce competition, unfair competition, got criticized by the national government. The country has launched some policies to crack down on those unfair competitions. From Leapmotor's perspective, we strongly support the country's policy. We do not think that the policy changes will have a negative impact on the whole industry's development. We are not worried about next year's policy changes. We introduced related strategies based on our assumption of profitability. I believe that in the premise of ensuring profitability, the price and the service we can offer is really competitive.
Compared with our competitors, our strategies or the price strategies are not very aggressive. We don't think extremely aggressive competition strategies can last very long. If it's too aggressive, it's really difficult to support the company's long-term development. Therefore, from our perspective, we don't have too much concerns. We have our own calculations, and we will develop and change our policies based on our product capacity and on our cost control capability.
Okay. I would like to repeat my second question because there are many new energy forces that are sold very well in Europe. Also, Stellantis, as its own models, also in terms of the sales, the increase is very minor. How would you improve your sales in Europe?
Yes, as you said, the models from Stellantis haven't achieved very remarkable sales. Our joint venture overseas is controlled by Stellantis.
Inside Stellantis, whether it is the president, our car, or other presidents, they both attach great importance to the cooperation with Leapmotor. They hope that the fast development of Leapmotor in Europe can support Stellantis' position in their new energy transformation. Whether it is our joint venture or our sales network in Europe, Stellantis has placed greater emphasis. They help us to have more to-be markets. Stellantis has really rich experience in to-be markets in Europe. Their special and professional team has been working with us to promote sales. They invest a lot of human resources and financial resources. Second, our localization, whether it is localization in Europe or in Southeast Asia, we rely on our local partners. Now we are investigating the market in South Africa as well. The local partners always helped us to enhance the efficiency and help us to have better local cooperation.
In the last year, actually, Stellantis has a better understanding. They have a deeper understanding of the importance of Leapmotor. In the last year, Stellantis, their management really understands how valuable, how important their investment in Leapmotor is. The value brought by Leapmotor is far beyond their expectations. By the end of December, as Leapmotor celebrates its 10th anniversary, the Stellantis management and the president, Alfa, will also come to Hangzhou to celebrate the 10th anniversary of Leapmotor. It shows the significance they've placed on the international cooperation with Leapmotor.
Okay. Next, we will ask the investor with the ending number 0877 to ask a question. I'm Shen Da from Puying International. I have two questions. The first, what's your plans for your domestic channels? How many new sales outlets or stores you are about to expand?
What are your expectations for next year's sales or transaction volumes per store? Second, next year, do you have updates on your profitability targets or your targets of net profit?
Okay. In terms of channel, we need to look at both the number and the quality. It is expected by the end of this year, we will have over 1,000 sales outlets. By the end of next year, the number will exceed 1,500. Our sales channels consist of three parts, including the personal experience center, the supermarket type experience center, and our online platforms. As our A-Series models launch to the market and as our B-Series reach very good sales, we will open more sales outlets and channels in lower-tier cities such as the fourth tier or fifth tier.
We will penetrate to those lower-tier cities and further expand our sales network to better cope with our new product sales next year. In terms of channels quality, we insist on the one-plus-channel strategy. That is one of our business plans. Now we already have a powerful, very strong channel team. From now on, our overall channel capacity has been continuously optimized. Fourth, we continue to uphold and strengthen the channel management philosophy centered on the dealer's profitability in 2026. As of October, the overall profit margin from dealer channels also exceeded 80%, indicating that we have achieved cumulative profits with 80% of our dealers from January to October. This situation is very healthy, and we want to maintain it to form a very healthy channel system that is profitable and that is able to control inventory as well.
Dealers can also make a profit, and only in this way they want to invest more to help Leapmotor promote its sales. In terms of the efficiency, next year, there will be four models launched to the market. The sales per store will definitely increase. That's something for sure. First, as the overall sales is expected to improve, the sales per store will also enhance accordingly. The per-store efficiency will also be enhanced. We want to provide better experience from visiting to the dealership to having a test drive to reaching the final deal. The whole experience should be optimized. As a result, we expect to see an increase in sales. If the conversion rate increased, it will contribute to a higher sales.
Second, if we want to enhance the convert rate, the investment will be enhanced, but we need to think about how to reduce cost. Next year, our net profit target is about CNY 5 billion, and this is our target. Our sales target next year is 1 million units.
Okay. Thank you. We are limited by time. It will be the last question. The user with the phone number ending 7820, please ask a question. Hello, I'm Ms. Wang. In the market, from CNY 200,000-CNY 300,000. We already received some market feedbacks, and this is the first model that's entering the higher-end segment. I would like to see what's the biggest challenge you see in terms of pricing. Do you think you can strike a balance between price and the sales volume? Or are you willing to compromise price in order to maintain your sales targets?
Sorry, I could not hear you very clearly. There is some background noise, but I can generally understand your question. You mentioned the D-Series and the market feedback from the D-Series and how we strike a balance between the D-Series price and the sales targets. Is that your question?
Yes. Yes.
Actually, I have mentioned a little bit those questions. In terms of the feedback of D-Series, in October, after the B-Series was launched to the market, the market feedback was excellent, was extraordinary. We achieved our sales targets of D-Series. As I said, the order volume of D-Series is largest at the same period compared to all of our other models. That means D-Series is highly recognized by our users and the market. We are very confident about this product. It is really recognized by the market.
In the future, we will release more information about D-Series and our new products. I believe that if you have a better and deeper understanding of our products, you will recognize it at a higher degree. I believe that when the new model is launched to the market, when you see it in the real world, when you take a test drive, you will give it a thumbs up. You will also be very confident about this product. Will you also mention pricing and how to strike a balance between price and the sales volume? This D-Series targets at the CNY 300,000 segment. In this market, I believe that D-Series is the most cost-effective model. Of course, you can find a cheaper car than D-Series, but the configurations will also be much worse.
For instance, we use very advanced batteries, and the mileage can be as low as 500 km. You could not compare our models with hybrid models with a mileage of only 100 km, which is produced by our competitors, right? If you just compare price alone, it is not justifiable. We need to have a comprehensive evaluation considering both price, technology, experience, and configuration. That is why we set our gross profit margin between 15%-20%. At this price range, we believe that when the final B-Series is launched to the market, it is presented in front of you, you will be very surprised. It will be eye-opening. It will be mind-blowing. You will be surprised how sophisticated, how excellent this series is. We are really confident about our own products, and we are also confident about our dealers and suppliers.
We believe that this new B-Series and D-model will be pioneering and will make a breakthrough in this market. Okay. Thank you very much. Thanks for your attention. Thanks for the active participation from the management and from all investors, and thanks for the answer from the management. We look forward to seeing and talking with you next time, whether the management from Leapmotor would like to deliver a summary. Okay. Thanks very much for joining the quarter three online meeting. In the past three quarters, I believe that you've seen the strong performance of Leapmotor, and that's beyond our expectations, whether it's in sales or in net profit. In sales, we reached a sale of about 460,000 units. In terms of net profit, we managed to transfer the profits in just six months. The net profit is about CNY 200 million.
It's really strong, and we expect that the profitability and the net profit will be even higher in quarter four. Overall sales will see an increase compared to quarter three. In order to achieve our annual sales target of 580,000-650,000 vehicles, we are confident that we will achieve that. As our model E-Series, D-Series, and A-Series got launched consecutively, we are confident that in all measures, Leapmotor's performance will be stronger and stronger, and we will deliver a better result in the capital markets. Ultimately, it still depends on our strength and capacity. We are confident that we will achieve the 1 million vehicle target for next year, and the whole team, the entire company, will focus on achieving it. Thanks very much, everyone. Thanks for supporting and trusting Leapmotor.
Okay. I would like to have a final thank you to all the participants and to the management. Please stay tuned, and please stay tuned to see the future performance of Leapmotor. Thank you.