CLSA analyst Aaron Li lowered on Tuesday the company’s price target on Chinese EV makers NIO from $30 to $27.50, representing a 8.33% cut, and also XPeng from $42 to $35, a 16.7% cut. NIO shares closed 4.96% lower at $19.17 per share while XPeng shares dropped 1.60% to $22.69 per share.
“We maintain our profit forecasts or XPeng-US and XPeng-HK, and we give the same 12 month forward P/S ratio to XPeng as NIO. Our target market capitalization is USD30.2bn based on 2.1x 12-month forward P/S ratio (previous P/S ratio was 5x on 22CL sales revenue) and we set the new target price for XPeng-US at USD 35.00 (previous USD 42.00) and XPeng-HK at HKD 136.00 (previous HKD164.00). We maintain a BUY,” the analyst wrote.
Based on the last closing price, the new price targets imply an upside potential of 43.45% for the Shanghai-headquartered NIO and 54.25% for the Guangzhou-based XPeng.
Earlier this week, the analyst also initiated coverage on Li Auto shares with a Buy rating and a price target of $49 per share, an upside potential of 46% based on Friday’s closing price. Aaron believes the second model of the Chinese PHEV maker will “continue to attract family consumers based on its intelligent design and attractive price”.
In late-March, Aaron Li initiated coverage of XPeng shares with a Buy rating and $42 price target enhancing the investment made by the company on Autonomous Driving while considering it the leader in software, localized R&D, and driving data and algorithm accumulation.
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CLSA initiated coverage on NIO shares in April 2021 with a Buy rating and a price target of $50 when the stock was trading around $39 per share. On February 16, CLSA analyst Soobin Park lowered NIO’s price target to $35 from $60.
At the time, the analyst said “Indicators are on and NIO is signalling a new direction into new luxury EV, global and even mobility markets”.
“After establishing itself as a premium electric SUV maker over a mere seven years, it is now planning to move into sedans as well as going on a European drive. Its innovative battery-charging model may be a major draw for users and differentiates it from other high-end EV producers, as does its investment in future technology. We initiate coverage at a BUY with a US$50.00 target, powered by our 48% sales Cagr assumption over 2020-25CL,” she added.
CLSA’s parent company CITIC Securities is China’s leading brokerage and investment bank.