Xpeng: Performance Set to Soar

Financial Highlights

Xpeng Motors recently released its Q3 earnings report, slightly beating revenue expectations and achieving a record-high gross margin. However, the stock initially plunged 8% before recovering to a 3.77% loss, indicating mixed market reactions.

Key Insights

Revenue Performance:

Q3 revenue reached RMB 10.1 billion, up 18.4% YoY, slightly above the RMB 9.91 billion forecast.

Business Breakdown:

Vehicle Sales: RMB 8.8 billion, up 12.1% YoY.
R&D and Spare Parts: RMB 1.31 billion, a 91% YoY surge driven by technical collaboration with Volkswagen, with a 60% profit margin far exceeding vehicle sales.

Sales Data:

Q3 deliveries totaled 46,533 units, up 16.3% YoY.
New model Mona 03 performed strongly but dragged down the average price to RMB 120,000, reducing per-unit revenue by 3.5% YoY.

Gross Margin:

Overall gross margin hit 15.3%, a record high.
Vehicle gross margin stood at 8.6%, well below its peak of 13.6% and Li Auto’s 21%.

Market Concerns

Guidance Focus:
Investors are closely watching Q4 projections:

Deliveries: 87,000–91,000 units, up 44.6%–51.3% YoY, with November expected to surpass 30,000 units for the first time.
Revenue: RMB 15.3–16.2 billion, up 17%–24%, beating the RMB 14.7 billion market estimate.

Stock Performance Drivers:

Low-Priced Models Drag Growth:
- Despite surging sales, the rising proportion of lower-priced models limits revenue growth—a challenge also seen at Li Auto.
High Valuation Concerns:
- Xpeng’s price-to-sales ratio (P/S) is 2.4x, significantly higher than Li Auto (1.2x) and NIO (1x), raising doubts about valuation sustainability.

Long-Term Outlook

Product Strategy:

Mona 03 is a blockbuster, and the newly launched P7+ received over 30,000 orders on its first day. Revenue growth may align with sales growth as these models gain traction.

Future Models:

Xpeng plans to release an extended-range EV in 2025, expected to drive another sales surge. Analysts predict 2025 revenue to reach RMB 67.1 billion, a 62% YoY growth.

Investment Takeaway

Xpeng’s focus on intelligent features at competitive prices, offering L3-level driving experiences at L2 prices, positions it well in untapped market segments. If short-term fluctuations correct the high valuation, it could present a compelling entry point for investors.

XPeng Beats While NIO Lags: Which EV Will You Bet?

XPeng jumps 4% in the premarket trading after it reported third-quarter revenue of 10.1 billion yuan, compared to 8.53 billion yuan in the same period last year. The market had anticipated revenue of 9.91 billion yuan. Nio drops 5% after earnings. Revenue was 18.6735 billion yuan, a year-on-year decrease of 2.1%. Net loss amounted to 5.0597 billion yuan, an increase of 11.0% compared to the same period last year. --------------- XPeng Beats, NIO Misses: Which EV Maker Do You Bet On Amid the Shake-Up? What's your target price?

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