Shenwan Hongyuan Maintains "Buy" Rating on XPENG-W (09868), Q3 Meets Expectations with Full Transition to AI Enterprise

Stock News11-26

Shenwan Hongyuan Group Co., Ltd. reiterated its "Buy" rating on XPENG-W (09868), citing the company’s new vehicle cycle, faster-than-expected external partnerships and internal reforms, significantly improved profitability, and potential breakthroughs in robotics and flying car businesses. Key highlights from the report include:

**Financial Performance** XPENG reported Q3 2025 revenue of RMB 54.5 billion (+120% YoY), with a gross margin of 17.9% (+3.7 ppts YoY). Net loss attributable to shareholders narrowed to RMB -1.52 billion, improving by RMB 2.94 billion YoY. In Q3 alone, revenue reached RMB 20.4 billion (+102% YoY, +12% QoQ), with gross margin at 20.1% (+4.9 ppts YoY, +2.8 ppts QoQ). Net loss further narrowed to RMB -380 million, a YoY improvement of RMB 1.43 billion and QoQ improvement of RMB 100 million.

**Sales Mix and Margin Dynamics** The launch of the G7 in Q3 accounted for 13% of total deliveries, while temporary shifts in sales mix for the G6, G9, and X9—due to consumer anticipation of the extended-range platform—dented auto gross margins slightly. However, service and other income surged 78.1% YoY (67.3% QoQ) to RMB 2.33 billion, driven by breakthroughs in the Volkswagen technology partnership, lifting overall margins.

**Q4 Outlook and Growth Drivers** XPENG guided Q4 deliveries to a record 125,000–132,000 units, with a potential quarterly turnaround to profitability. The MONA M03 and upgraded P7+ models are expected to boost monthly sales from 10,000 to 30,000 units, while the G7’s L3 autonomous driving capabilities mark a new era. The extended-range X9, debuted at the Guangzhou Auto Show, is poised to drive Q4 sales growth, with future models incorporating this platform to expand market share.

**AI Transformation and Future Initiatives** XPENG is redefining its vehicles as next-gen robots, integrating internet platforms/ecosystems, with software projected to comprise 50% of value. Its seventh-gen humanoid robot, emphasizing full-stack R&D and cross-domain integration, targets mass production within 18 months at car-like price points. Additionally, its cost-efficient L4 robotaxi model offers superior commercialization potential versus peers. This comprehensive AI pivot underscores XPENG’s high success probability and uniqueness.

**Risks** Intensifying NEV competition, raw material price volatility, and potential delays in overseas expansion or new business initiatives.

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