To The Moon

🌟🌟🌟$XPeng Inc.(XPEV)$  has just reported its Q423 earnings yesterday that saw record revenue with net loss narrowing significantly and gross margin turning positive.

XPeng reported revenue of RMB 13.05 billion (USD 1.84 billion) in Q423, up a massive 153.9% from the previous year quarter and up 53% from 3Q23.  This increase in revenue was attributed to a slight increase in average selling price and a higher mix of its G9 model sales. 

XPeng also reported a net loss of RMB 1.35 billion for Q423 compared to RMB 3.9 billion in the previous quarter. 

XPeng saw its vehicle gross margin improve by 10% quarter over quarter to 4.1% marking a return to positive figures. 

Operating expenses presented a mixed picture with Research and Development costs remaining flat compared to the previous quarter while selling, general and administrative expenses climbed 14%.  However the operating expense margin shrunk by 16% which was reported to be the best quarter since XPeng's IPO. 

XPeng delivered a record 60,158 vehicles in Q423, up a huge 170% year on year and up 50% from Q323.  This is within its previous guidance range of 59,500 to 63,500.

XPeng's cash and cash equivalent, restricted cash, short term investments were RMB 45.7 billion as at December 31 2023, compared to RMB 36.48 billion as of September 30 2023.

XPeng's delivery guidance for Q1 24 is between 21,000 to 22,500 units.  Since XPeng has already delivered 8250 units in January and 4545 units in February, this means it expects to deliver 8205 to 9795 units in March. 

XPeng guided its Q1 24 revenue to be in the range of RMB 5.8 billion to RMB 6.2 billion, up about 43% to 53% year on year. 

XPeng has also announced that it will launch a new brand within April 2024, targeting a market with prices ranging from RMB 100,000 (USD 13,900) to RMB 150,000 according to XPeng's CEO He Xiaopeng.  XPeng's new brand's model will be aimed at the global market.  XPeng will bring its intelligent driving and future autonomous driving capabilities to the new brand and be able to make a profit. 

XPeng's current models on sale include the P5, P7, P7i, G6, G9 and X9 which are mainly aimed at the price range of RMB 200,000 to RMB 300,000. 

XPeng signed an agreement with DiDi on August 27 2023 to acquire DiDi's smart car development business assets.  XPeng 's new brand is codenamed Mona. 

In July 2023, XPeng has also signed an agreement with Volkswagen to jointly develop 2 new EV models under the Volkswagen brand in China.  In return Volkswagen has invested USD 700 million to take up a 5% stake on XPeng. 

Wall Street Analysts are bullish on XPeng with a Buy Rating, Target price of USD 12.75, an upside potential of 28%.  Morgan Stanley is even more Bullish with an Overweight rating on XPeng with a Target price of USD 18.00, a massive upside potential of 100% after XPeng's Q423 earnings beat expectations. 

I believe that XPeng has lots of upside potential in view of its latest Q423 sterling earnings report and the launch of a lower cost EV with intelligent driving and even future Autonomous driving capabilities as announced by its CEO recently. 

Performance wise XPeng is down 2.9% in the past 5 trading days and 29% down year todate.  However XPeng is up 8% in 2023. 

At the last closing price of USD 9.89, XPeng has lots of exponential growth ahead.  It is a good time to bargain hunt this great EV stock now to reap the rewards in the long term. 

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