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.
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