20230201-招银国际-4Q22E_net_loss_to_narrow__sales_as_key_to_FY23_4页_830kb

Xpeng Inc. (XPEV US) Company Update Summary

Core Content

This report provides an equity research update on Xpeng Inc. (XPEV US), focusing on its financial performance and future outlook. The key areas of analysis include 4Q22E earnings, FY23E sales volume growth, and valuation considerations.

Main Points

4Q22E Financial Outlook

• Net Loss Narrowing: Xpeng's 4Q22E net loss is projected to narrow slightly to RMB 2.0bn, primarily due to a forex gain from RMB appreciation against USD.
• Revenue and Gross Margin: Revenue is expected to decline QoQ, with a gross margin of 11.2%, 2.3 ppts lower than 3Q22.
• Operating Loss: Operating loss is expected to widen QoQ, but the company's RMB 35bn net cash position may support it for 2-3 years.
• Sales Volume: 4Q22E sales volume slightly exceeded prior guidance, with the G9 model accounting for 28%.

FY23E Outlook

• Sales Volume Growth: Xpeng's FY23E sales volume is projected to grow 28% YoY to 155,000 units, driven by two new models and three facelifted versions of existing models.
• Gross Margin: Gross margin is expected to improve to 13% in FY23E, partially offsetting margin pressure from competition.
• Net Loss: Net loss is projected to narrow slightly in FY23E compared to FY22E, assuming no significant forex loss.
• Investor Focus: Investors are likely to focus on sales volume growth and new models as key indicators for long-term survival.

Company Survival and Competitive Position

• Net Cash Position: Xpeng has a RMB 35bn net cash position, which could support operations for 2-3 years.
• Competitive Standing: While it's too early to determine if Xpeng can survive in the heightened NEV competition, Li Auto and NIO are considered better positioned for long-term success.

Key Financial Projections

Earnings Summary (YE 31 Dec)

Valuation and Target Price

• Rating: BUY
• Target Price: US$18.00 (previously US$20.00)
• Valuation Multiple: Based on 2.5x of FY23E revenue estimates
• Key Risks: Slower autonomous driving technology development, faster competition catch-up, lower sales or margin than expected, and sector de-rating.

Key Ratios

Shareholding and Performance

• Shareholding Structure:

  • He Xiaopeng: 21.2%
  • Taobao China: 11.2%
  • Others: 67.6%

• Share Performance:

  • 1-mth: 6.7%
  • 3-mth: 45.4%
  • 6-mth: -58.7%

• Stock Data:

  • Market Cap: US$8,644 million
  • 52-week High/Low: US$40.73 / US$6.41

Analyst Certification and Disclosures

• The analyst certifies that the views expressed accurately reflect their personal views and that compensation is not related to the report's content.
• The analyst has not traded in the stock covered in the report within 30 days prior to its release.
• The report is not an offer or solicitation to buy or sell securities.
• CMBIGM does not provide individually tailored investment advice and recommends consulting a financial advisor.

Conclusion

Xpeng Inc. is expected to see a slight narrowing of net loss in 4Q22E due to forex gains, despite lower revenue and margin pressure. Sales volume growth is critical for its long-term survival, with a projected 28% YoY increase in FY23E. While the company has a substantial net cash position, it faces significant challenges from competition, and its valuation is considered lower than that of Li Auto and NIO. The BUY rating remains, with a reduced target price of US$18.00, based on revised revenue estimates. Key risks include slower technology development, faster competition, and sector-wide de-rating.