3Q21 performance exceeded market expectations
XPeng Inc. announced 3Q21 results: 3Q operating income of 5.72 billion yuan, year-on-year / month-on-month respectively + 187.4% Universe 52.1%. The net loss of homing under Non-GAAP was 1.49 billion yuan, which was enlarged compared with the same month. The increase in the proportion of P7 sales led to a new high gross profit margin, exceeding market expectations.
Development trend
Product structure improvement continues to boost profitability, 3Q21 gross profit margin hit a new high. 3Q delivery volume of 25666 vehicles, another quarterly high. Among them, P7 accounted for 76.9%, year-on-year / month-on-month ratio + 3.5/10.7ppt, respectively, driving ASP + 3.1% to 223000 yuan; 3Q gross profit margin reached a quarterly high of 14.4%, year-on-year / month-on-month ratio + 9.8/2.5ppt, structural improvement and scale effect effectively hedged the impact of core deficiency and high raw material prices. The 3Q expense rate is from-1.4ppt to 49.0%, and the R & D / sales ratio is from-0.9/0.5ppt to 22.1% and 26.9%, respectively. Under Non-GAAP, the net loss of homing mother was 1.49 billion yuan, which was enlarged compared with the same month.
The 4Q21 delivery volume outlook is robust, and the new car G9 improves the product matrix. Looking ahead to the fourth quarter, the company expects to deliver 34500-36500 vehicles and shows confidence in the November December impact of delivering 15000 vehicles a month, and we expect delivery to exceed guidance under improved supply. In terms of new cars, the sedan XPeng Inc. P5 is full of orders, and after the delivery period is extended to the Spring Festival in 2022, we expect to steadily climb the slope to contribute to the increment. The medium and large SUV XPeng Inc. G9 was officially launched at the Guangzhou Auto Show. It is the first mass-produced model with 800V SiC platform and 480kw high-pressure charging pile in China. In terms of intelligence, the G9 is equipped with self-developed X-EEA 3.0 electronic and electrical architecture and domain controller, and will be launched with XPilot 4.0. We believe that the G9 will not only complement the company's product matrix, but also bring ASP improvements and gross margin improvements.
Adhere to software and hardware self-research, build scientific and technological advantages and business model innovation. The company adheres to the full stack self-research of software and hardware, and realizes the intelligent function to take the lead in landing and rapid iteration, and the advantage of differentiation has been continuously consolidated and strengthened. At present, the company has more than 4000 R & D personnel, an increase of more than 100% compared with the end of 2020. We believe that the follow-up company will make more breakthroughs in intelligent driving, intelligent cockpit, efficient energy replenishment and other areas. In terms of business model, on the one hand, the company's software revenue is expected to increase with the release of XPilot's intelligent driving function, on the other hand, the operation of the company's Robotaxi in 2022 will promote the iterative upgrade of its intelligent driving system, as well as an experimental layout in the field of intelligent travel.
Profit forecast and valuation
The company's current share price corresponds to 6.2x EV/Revenue in 2022, and we maintain the company's earnings forecast and outperform industry rating unchanged. Taking into account the higher-than-expected space for the company's new model sales and the potential increase in profitability brought about by technological advantages, the company was given a valuation of 9 times the 2022 EV/Revenue, corresponding to an increase of 15% of the company's US / Hong Kong stock target price of 15% to US $69 / HK $271, which is 43% higher than the current share price.
Risk
The epidemic and chip shortages affect production and marketing; the launch of new cars is not as fast as expected.