Product portfolio improvements continue to boost profitability. The company disclosed its quarterly report for '22. Revenue of 1Q in '22 was RMB 7.455 billion, +152.6% year on year, -12.9% year-on-year; automobile gross profit margin was 10.4%, +0.3pct year on year, -0.5pct month-on-month; overall rate was 38.4%, -4.2pct year on year, -2.1pct month-on-month; net loss of 1,701 billion yuan, -116.2% year-on-year, -32.1% month-on-month, mainly due to the adverse effects of supply delays and rising raw material prices on the cost side. 3,4561 vehicles were delivered, up 159% year on year. Of these, demand for P7 was strong. A total of 19,427 vehicles were delivered, up 143.6% year on year. With the recovery of production and sales in the post-pandemic period, combined with the launch of new cars, the third quarter is expected to open up profit space.
A/B class cars are steadily releasing incremental volume, driving breakthroughs in C-class products. Supply was under pressure due to the pandemic in April. According to the Securities Times, benefiting from the better control of the epidemic in Guangdong, the Zhaoqing factory resumed double-shift production in mid-May. Production and sales of its A/B class models are expected to recover and steadily release incremental growth. The new G9 was launched in the 3rd quarter, opening up a market of more than 300,000 yuan, and achieving a breakthrough in C-class products from 0 to 1.
The level of intelligence is leading, and technological innovation drives the inflection point of industrialization. Through its advantages in the intelligent field and highly competitive product pricing, Xiaopeng Motor has created the core competitiveness that drives long-term steady growth in sales. According to First Electric Network, Xiaopeng will launch the urban NGP in the first half of '22. It will be installed on the P5 model, which is expected to achieve L2.5+ autonomous driving. According to Xiaopeng Motor's disclosure, the company has deployed 480kW fast charging piles, and the new G9 is based on an 800V high-voltage platform. It will continue to promote the industrialization of 4C fast charging technology in the future; exploring integrated body and chassis die-casting technology, which is expected to be applied on a large scale in '23.
Profit forecasts and investment recommendations. The company is expected to achieve revenue of 462.15/795.22/133,082 billion yuan in 22-24. The company targets new car companies at home and abroad, focusing on the advantages of intelligence. The monthly sales volume has reached the leading level of new domestic forces. The PS valuation is 5 times higher than that of 22 years. Calculating HKD/USD to RMB 0.85/6.65 per share, corresponding to a reasonable value of HK$159.09 per share, 43.29 US dollars/share, maintaining the “buy” ratings for H shares and US stocks.
Risk warning. Sales of new energy vehicles fell short of expectations; supply of raw materials fell short of expectations.