To The Moon

Just now, $XPeng Inc.(XPEV)$ $XPENG-W(09868)$ released its fourth-quarter report, and the stock price rose over 3% in the pre-market.

The strong trend made people mistakenly believe that the financial report was amazing, but after careful examination, there was not a single bit of optimistic information besides the reduction in losses.

Specifically, XPeng's fourth-quarter revenue reached 13.05 billion yuan, a year-on-year increase of 153.9%.

The surge in revenue was mainly driven by sales, with 60,792 vehicles delivered in the fourth quarter, an increase of 173.8% compared to the same period in 2022.

However, the revenue per vehicle in the fourth quarter was 203,000 yuan, a decrease of 3.3% compared to the same period in 2022, dragging down the revenue growth.

With the boost from sales, the gross margin returned to positive territory, reaching 6.2%, but still lagging behind $NIO Inc.(NIO)$ $NIO Inc.(NIO.SI)$ $NIO-SW(09866)$ and $Li Auto(LI)$ $LI AUTO-W(02015)$ .

The sales and administrative expense ratio fell to 14.8% in the fourth quarter, while the R&D expense ratio decreased to 10%.

If reducing the sales and marketing expenses is a cost-cutting measure, then cutting back on R&D investment is really taking it to the extreme. It may affect the competitiveness of future products.

With the increase in sales and control of expenses, XPeng's net loss in the fourth quarter was 1.35 billion yuan, a significant reduction from the 2.36 billion yuan loss in the same period of 2022.

But it's worth noting that this "reduced loss" performance needs to be taken with a grain of salt. The fourth quarter included significant non-operating income. If we look at operating income, the loss in the fourth quarter of last year was 2.05 billion yuan, while it was 2.52 billion yuan in the same period of 2022. Although there was also a reduction, it wasn't as significant as the net profit figure suggests.

Looking ahead to the first quarter of this year, Xpeng expects revenue to be between 5.8 and 6.2 billion yuan, a year-on-year increase of 48.9% when calculated using the median value. The company expects sales to be between 22,000 and 22,500 vehicles. Considering that 12,795 vehicles have already been delivered in January and February, the estimated sales in March will be around 8,955 vehicles, a year-on-year increase of 27.9%.

The first-quarter performance looks like it's still maintaining a decent growth momentum, but compared to the first quarter of 2022, revenue has declined by 19.5% and sales have fallen by 37%!

In the past two years, XPeng has launched several models, such as the G6, G9, and X9, but the increase in models hasn't led to an increase in sales. Instead, there's been a noticeable decline. This kind of performance is obviously unacceptable.

Compared to competitors like NIO, Li Auto, $BYD Co., Ltd.(BYDDF)$ $BYD COMPANY(01211)$ , and Seres, they all have hit models that are driving their sales. But when it comes to XPeng, which model can be considered a hit?

None, absolutely none!

It's clear that XPeng has made significant strategic mistakes. Although it claims to be a technology leader, its sales performance is dismal. Even with 45.7 billion yuan in cash and cash equivalents on its balance sheet, how can XPeng regain investors' confidence?

Perhaps the reason why XPeng's co-founders Xia Heng and He Tao resigned from the "core management team" is due to such dire circumstances. With a shake-up in the senior leadership, if XPeng still can't successfully create a star model, it would be really pathetic. It makes one wonder if the CEO is really competent?