According to the December sales report released by XPeng (“XPeng” or the “Company”, NYSE: XPEV, HKEX: 9868.H), XPeng delivered 16,000 units in December, an increase of 177.5% year-on-year, and delivered 98,155 units cumulatively in 2021, an increase of 263% year-on-year. Different investment institutions are optimistic about the future of XPeng.
CICC maintains its 2022 earnings forecast and “outperform” rating for Xpeng, which has a 37% upside to its current share price in 2022, and estimates that Peng will earn $376 million in 2023 for following reasons.
- Firstly, Xpeng achieved excellent results this year. By model, in December, P7 delivered 7459 units, up 102.1% YoY, with steady demand; G3i delivered 3511 units, up 74.8% YoY. P5, which started delivery in October, achieved delivery of 5030 units, up 133.5% YoY, higher than the level of P7 in the same period, while exceeding market expectations. Compared to its competitors, CICC believes that P5 has a strong advantage in intelligence, space and other product strengths, and is expected to reach a stable monthly sales level of 10,000 units subsequently. In addition, the XPeng 4Q achieved a combined delivery of 41,751 units, significantly exceeding the company’s previous estimate of 34,500-36,500 units.
- Secondly, CICC believes that XPeng’s monthly sales level will continue to improve in 2022 due to its scale advantage. As of the end of November 2021, XPeng has 661 branded supercharging stations in 228 cities; In addition, XPeng operates 311 sales stores in 121 cities, with monthly sales per store continuing to improve sequentially. In 2022, along with the delivery of the XPeng G9, CICC believes XPeng will further improve its product matrix in the $150,000-$400,000 price range.
- The G9 is not only expected to drive profit improvement, but also as the first flagship model developed by XPeng for the global market, it is expected to further accelerate the company’s overseas expansion progress.
- Finally, XPeng insists on full-stack self-research of software and hardware to achieve rapid implementation and iterative update of intelligent functions, and the differentiation advantage is continuously consolidated and strengthened. Currently, XPeng has over 4,000 R&D staff, an increase of over 100% from the end of 2020. CICC believes that XPeng will make more breakthroughs in the fields of intelligent driving, intelligent cockpit and efficient energy replenishment.
In terms of business model, on the one hand, XPeng’s software revenue is expected to improve along with the upgrade of XPilot intelligent driving function. On the other hand, the operation of XPeng’s Robotaxi in 2022 can promote the iterative upgrade of its intelligent driving system.
In addtion, Daiwa’s research report says that XPeng’s 2022 deliveries could double to more than 186,000 units. Daiwa expects the XPeng P5 and P9 to be the main sales drivers in 2022.
Through its superior smart driving technology and production capabilities, XPeng will have the opportunity to increase its share of the electric vehicle market in China. Daiwa maintains a “Buy” rating on XPeng’s U.S. shares, but also points to the impact of the epidemic on the global automotive chip supply chain as a key downside risk .