To The Moon

Did you know that US stocks have logged a 3rd month of straight losses, for the first time since the onset of covid-19, back in March 2020? It remained true until the last trading day of October. On Tues, 31 Oct 2023, when market called it a day, it ended higher as investors weighed fresh consumer confidence data (see below). The Consumer Confidence Index (CCI) for October 2023, declined moderately to 102.6. It has beaten analysts’ forecast of 100, though. Compared against an upward revised September’s index of 104.3, October data is “down” marginally (-1.7). More important, it is the 3rd consecutive month that the index has tapered down. Indicating & implying that consumer fears of an impending recession have increased. This is consistent with the short and shallow economic contract

SummaryMr. Market has prematurely reacted to the Israeli news with a -$1.62B correction in XPEV's Enterprise Value then, since the estimated value of the deliveries is only at $43.87M.Even if these deliveries are eventually not paid for, we are not overly concerned, since they only make up a small part of the automaker's FQ3'23 deliveries of 40K units.While XPEV may achieve improved operating/production scale by FY2024, we do not expect to see its gross margins to drastically improve by FQ3'23 yet, based on the management's commentary.Investors must also note that the automaker has guided continuous investments in its R&D efforts "related to the development of new vehicle models," implying its intensified cash burn rate moving forward.We maintain our view that the XPEV stock