20220824-招银国际-New_Xpeng_in_the_making__4页_831kb

Xpeng Inc. (XPEV US) Company Update Summary

Core Content and Key Information

Xpeng Inc. (XPEV US) is a Chinese electric vehicle (EV) manufacturer that has been under close scrutiny due to its financial performance and strategic moves in the competitive EV market. The report highlights the company's financial guidance, strategic product launches, and valuation considerations.

Main Points

3Q22 Financial Performance

• Operating Loss: RMB 2,091 million, in line with prior forecast.
• Forex Loss: RMB 938 million, leading to a worse-than-expected net loss.
• Sales Guidance: 29,000-31,000 units for 3Q22, below expectations.
• G9 Delivery Delay: Postponed to October 2022, which raises concerns about the second upmarket move.
• Sales Volume Forecast Cut: FY22E sales volume revised down to 147,000 units from 190,000 units.
• FY23E Sales Volume Cut: Revised down to 250,000 units from 320,000 units.

Strategic Upmarket Move

• Xpeng plans to scale back the G3 and P5 models next year.
• Two new more-premium models are expected to upscale the company's branding.
• The P7 model has already succeeded in an upmarket move with advanced ADAS features.
• The G9 is the key model for the second upmarket move, but its success is uncertain due to the need for more than just ADAS features to attract demanding consumers.
• The company has prepared 800V fast charging and new platforms for this move, but the timing and reception remain critical.

Valuation and Key Risks

• Revenue Revisions: FY22E and FY23E revenue revised down by 28% and 10%, respectively.
• Net Loss Projections: Larger net losses in FY22E and FY23E than previously estimated.
• Target Price: Revised from US$60.00 to US$40.00, based on a 3.2x FY23E revenue multiple.
• Key Risks:
  • Slower progress in autonomous driving technology.
  • Faster catch-up from competitors in highway NGP.
  • Lower-than-expected sales volume and/or gross margin.
  • Sector de-rating.

Financial Summary

Revenue Growth

• FY20A: 151.8%
• FY21A: 259.1%
• FY22E: 62.8%
• FY23E: 98.8%
• FY24E: 26.2%

Profitability Metrics

• Gross Margin:
  • FY20A: 4.6%
  • FY21A: 12.5%
  • FY22E: 12.2%
  • FY23E: 16.4%
  • FY24E: 19.2%
• Operating Margin:
  • FY20A: -73.5%
  • FY21A: -31.3%
  • FY22E: -22.6%
  • FY23E: -7.6%
  • FY24E: -1.9%
• Net Margin:
  • FY20A: -83.7%
  • FY21A: -23.2%
  • FY22E: -22.0%
  • FY23E: -6.2%
  • FY24E: -0.8%

Balance Sheet Ratios

• Net Cash/Total Equity (x):
  • FY20A: 1.0
  • FY21A: 1.0
  • FY22E: 0.9
  • FY23E: 0.7
  • FY24E: 0.7
• Current Ratio (x):
  • FY20A: 5.1
  • FY21A: 2.7
  • FY22E: 1.6
  • FY23E: 1.1
  • FY24E: 1.0

Stock Data

• Market Cap: US$18,022 million
• Average 3-month Turnover: US$276 million
• 52-week High/Low: US$56.45/US$18.01
• Total Issued Shares: 1,713 million
• Shareholding Structure:
  • He Xiaopeng: 21.2%
  • Taobao China: 11.2%
  • Others: 67.6%

Analyst Ratings and Recommendations

• CMB International Global Markets (CMBIGM): BUY (Maintain)
• Target Price: US$40.00 (Previous: US$60.00)
• Upside/Downside: +90.5%
• Current Price: US$21.00

Key Ratios Summary

Conclusion

Xpeng Inc. is navigating a challenging environment with the potential for a price war in the next six months. While the company's valuation appears attractive, the uncertainty surrounding its second upmarket move and the delay in G9 deliveries raise concerns. The financial performance indicates continued losses, with a focus on improving gross margin and reducing operating losses. The company's strategic initiatives and technological advancements remain important for its long-term positioning, but the path to profitability is still uncertain. The updated target price reflects a more conservative outlook, and investors are advised to consider the risks and consult with a financial advisor.