US Tiger Securities analyst Bo Pei upgraded its rating on XPeng shares from Hold to Buy with a price target of $43.00, down from $50. The company reported this Monday its Q4 and 2021 Earnings Results beating Wall Street estimates. XPeng delivered 41,751 units in the fourth quarter of 2021, growing 222% year-over-year. During the full year of 2021 XPeng increased its deliveries numbers by 263% compared with 2020 and reached 98,155 units.
“We are upgrading XPEV from HOLD to BUY and decreasing PT to $43 (was $50) primarily on lower valuations of comps. With 4Q deliveries (41,751) preannounced, investors primarily focused on 4Q margin,1Q guidance and ’22 outlook. Vehicle margin was 10.9% in 4Q, up 410bps y/y but down 270bps q/q, mainly on model mix shift. The company guided 1Q deliveries to 33,500 – 34,000, 4% below our estimate, primarily on supply chain constraints and new COVID-19 cases causing delivery issues. XPEV will start delivering its first SUV model G9 in 3Q:22, and plans to launch two new modes in ’23. New models including G9 will enjoys higher gross margins compared with existing ones. XPILOT 3.5 is showing better than expected performance and mgmt. believes attach rate can reach 50% with the launch of XPILOT 4.0 next year.” — the analyst stated.
During Earnings Conference Call, CEO He Xiaopeng showed its confidence on XPeng’s XPILOT 4.0 Version: it “will boast a clear next-generation leap against other mass-produced advanced driver assistance systems. Simply put, under the premise of offering superior safety, the XPILOT 4.0 will feature a more comprehensive set of use scenarios, even wider geographical coverage and a better Q1 vehicle interface and in-vehicle experience for both drivers and passengers.”
“I have confidence in our ability to achieve structural improvement of gross margin for our new models, including G9 and ultimately improve overall gross margin. Our medium- and long-term goal is to increase the level of our overall gross margin above 25%. At the same time, we’ll remain dedicated to our vision and execute on our sounding strategy and operational literacy to continuously — to continually boost operational efficiency. Going forward, as we achieve economies of scale, while improving operating leverage, I believe our operating expense ratio will continue to trend downward.” — CEO added.
CLSA analyst Aaron Li initiated coverage of XPeng Motors with a Buy rating and $42 price target. The new price target implies an upside potential of 44.77%, based on the last closing price of $29.01, on Tuesday. Recently, Morgan Stanley analyst Tim Hsiao lowered the price targets on the Guangzhou-based company to $42 from $71 — a decrease of 40%.
The EV maker reached the production milestone of 100,000 units of its P7 Model. The EV maker reaches the milestone 695 days after starting the production of the sports sedan, on April 27, 2020, representing a new record for pure EV makers from emerging auto brands in China. The accomplishment reflects customers’ recognition of the P7’s quality and smart functionality, as well as the efficiency of XPENG’s production, supply chain management, and sales and service network. — the company added.
According to the photos posted on Weibo by the Car Blogger @汽车拍客阿睿, Xpeng P7 Performance has been under tests bringing LiDAR technology in the headlights and an improved steering wheel, the same used on the G9 model. The G9 SUV model was unveiled last November at Auto Guangzhou 2021 Show, and the company expects to start its deliveries by the end of August 2022.
The company announced that delivered 6,225 Smart EVs in February 2022, representing a 180% increase year-over-year. According to the company, the February deliveries consisted of 3,537 P7 smart sports sedans, representing a 151% year-over-year increase. 2,059 P5 smart family sedans were delivered in February, bringing cumulative deliveries of the P5 to 13,953 since its launch in September 2021. Also 629 G3 & G3i smart compact SUVs were delivered in February.
Written by Cláudio Afonso | info@claudio-afonso.com