Credit: XPeng App | @锹刀鱼

XPeng shares drop 5% as Macquarie analyst cuts sales volume estimates

Written by Cláudio Afonso | | LinkedIn | Twitter

The shares of the Chinese EV maker XPeng dropped 4.80% to $22.99 per share on Wednesday following the new note released by a Macquarie Research analyst lowering the stock rating from outperform to neutral.

The analyst said the company’s upcoming SUV G9 “can be competitively priced” adding that “it will help XPeng expand quickly into the affordable luxury market”. Recently, XPeng CEO He Xiaopeng wrote that he is “very confident in this flagship product” and that the G9 model will be the best SUV under RMB 500,000.

“We believe the main growth driver will be sales of the P5 and P7 models after component shortages are alleviated. The company also expects its new flagship model, G9, to be delivered in 4Q, and we believe that if the G9 can be competitively priced it will help XPeng expand quickly into the affordable luxury market.”

The analyst expects a slowdown in these markets and cut Macquarie’s XPeng 2H22 sales volume estimate by 18% to 93k units, which is equivalent to an 11% volume decrease for FY22E.

In addition, Macquarie slashed the price target on the shares (HK and NYSE) by 35% to HK$98/ US$25.

“While we expected XPeng to grow outside its core high-tier base by expanding its sales channel into low-tier cities via its dealership network, this growth is yet to materialize.”

Earlier this week, Morgan Stanley analyst Tim Hsaio reiterated the firm’s Overweight rating and $41 price target on the shares representing a 67.5% upside potential on the shares following “a better than expected July delivery numbers”.

The analyst said that “overall July sales volume came in slightly better than the reduced market expectation thanks to a more significant sales upturn at the end of the month, likely driven by promotions,” The Fly initially reported.

In August, XPeng plans to begin accepting reservations for its new, flagship G9 SUV followed by an official launch in September 2022. Hsiao commented saying, “all eyes are on the G9 launch, as the company plans to take pre-orders for the vehicle in August, followed by an official September rollout”.

The EV maker delivered 11,524 vehicles in July 2022, representing a 43% increase year-over-year and a 24.65% from the previous month with year-to-date deliveries reaching 80,507 vehicles, a 108% increase year-over-year.

XPeng detailed that deliveries included 6,397 P7s, 3,608 P5 smart family sedans and 1,519 G3i SUVs with the cumulative deliveries reaching nearly 220,000 as of the end of July 2022.

Written by Cláudio Afonso | | LinkedIn | Twitter