XPeng Inc., founded in 2015, locates middle-and high-end smart cars and is determined to be a smart car that understands China better. Since its birth, XPeng Inc. has identified the labels of intelligence and technology. 2021Q1 has taken the lead in charging for software, and the company's NGP share has also increased from 20% in 2020 to 25% of 2021Q1. In the company's P5 order for a new car listed in 2021, the proportion of lidar selection is more than 70%. XPeng Inc. 's intelligent attribute is deeply rooted in the hearts of the people. At present, the company has two core competencies in intelligence: full stack self-development of software and hardware and the largest market for card positions.
Intelligence subverts the automobile industry, and the core competitiveness is transferred. In the era of smart cars, software and services have gradually replaced the three major parts of traditional cars to become the focus of consumers, and the profit contribution has gradually shifted from automobile sales to automobile sales + service income. Due to the strong stickiness of service income, high gross profit margin and low marginal cost, with the increasing acceptance and demand of smart cars, the number of smart cars will further increase, and the profit of service may exceed the profit of selling cars in the future. At that time, the enterprises that can achieve closed-loop data through software and hardware self-research and have an advantage in software and services will be the biggest winners.
XPeng Inc. is a down-to-earth technical school, the first full-stack self-research software and hardware car company in China. XPeng Inc. has technical and practical genes and team, has always adhered to high R & D and high investment since its inception, and is the first car company in China to achieve full-stack self-development of hardware and software. 1) electrification: XPeng Inc. self-developed three-electricity system, layout charging network; 2) Intelligent: covering electronic and electrical architecture, autopilot and intelligent cockpit, the degree of self-research is the first in China. Especially in the field of self-driving, XPeng Inc. insists on making smart cars that understand China better. Compared with Tesla, Inc., he has advantages in localization in terms of technical route and R & D team, and NGP can achieve the best autopilot-assisted driving function in China.
The card position is the largest market, anchoring closed-loop data. Similar to Tesla, Inc. 's strategy of price reduction and volume reduction, XPeng Inc., as one of the self-developed car companies in the whole stack, lays out the product matrix of "G3roomP7roomP5 + medium and large SUV", locates the largest market segment 15-400000, achieves volume through technology upgrading and cost reduction of raw materials, rapidly increases ownership and gains a large amount of real local driving data, and helps autopilot algorithm speed up upgrade and iteration. Further enhance XPeng Inc. 's competitiveness and product power in self-driving and other aspects, attract more customers, form a positive closed loop, and drive XPeng Inc. 's profit model to gradually transform to back-end profit.
Investment suggestion: XPeng Inc., as one of the auto companies with full stack self-research, takes the lead in localized research and development and closed-loop data. according to the current layout and progress of the company, the company is expected to gradually open the gap with other car companies. take the lead in entering the era of advanced intelligent cars. Divided into automobile sales, software revenue, services and other three major businesses, we estimate that the total revenue of the company from 2021 to 2023 will be 187.02, 354.01 and 52.192 billion yuan. Give the company 8.5x PS in 2022, corresponding to the target price of HK $211.66, covering the company for the first time and giving the company a "buy-A" rating.
Risk tips: research and development progress and results fall short of expectations; sales fall short of expectations; autopilot-related accidents occur frequently; consumers' willingness to pay for software is low.