Matters:
Xiaopeng Motor released its results report for the fourth quarter of 2023. In the fourth quarter of 2023, the company achieved revenue of 13.05 billion yuan, an increase of 153.9%/53.0%, respectively. The company's loss in the fourth quarter reached 1.35 billion yuan, narrowing by 42.9%/65.3% year-on-month. For the full year of 2023, the company achieved operating income of 30.68 billion yuan, an increase of 14.2% over the previous year, and a net loss of 10.38 billion yuan for the year, an increase of 13.5% over the previous year. By the end of 2024, the company's cash and equivalent in hand reached 45.7 billion yuan.
Ping An's point of view:
The gross margin was successfully corrected in the fourth quarter. The company delivered 60,158 new cars in the fourth quarter of 2023, an increase of 170.9%/50.4%, respectively, in line with the company's previous delivery guidelines of 595-63,500 units for the fourth quarter. The company's automobile sales revenue reached 12.23 billion yuan in the fourth quarter, and the corresponding bicycle revenue was 203,000 yuan, which remained stable over the same period last year. In terms of gross margin, the company's overall gross margin for the fourth quarter was 6.2%, up 8.9 percentage points from the third quarter. Among them, the gross margin of the automobile sales business in the fourth quarter was 4.1%, an increase of 10.1 percentage points over the third quarter. The company successfully corrected gross profit in the fourth quarter of '23 according to the previous plan. Xiaopeng Motor's delivery guide for the first quarter of '24 was 2.1 to 22,500 units, up 15.2% to 23.4% year on year. The corresponding total revenue was 5.8 billion to 6.2 billion yuan, up 43.8% to 53.7% year on year. The revenue growth rate was significantly higher than the sales growth rate. This was mainly due to the increase in bicycle revenue due to the launch and delivery of the X9.
Expense growth in the fourth quarter was relatively restrained, and losses narrowed significantly compared to the same period last month. In terms of expenses, the company's R&D expenses for the fourth quarter were 1.31 billion yuan, up 6.3% year on year, and remained stable month on month. The company's cumulative R&D expenses in 2023 were 5.28 billion yuan, up 1.2% year on year. In terms of sales management expenses, the company's sales management expenses in the fourth quarter reached 1.94 billion yuan, up 10.3%/14.4%, respectively, and the sales management expenses ratio reached 14.8%, down 19.3/5.0 percentage points from the same period last month. Due to the relative restraint in cost growth in the fourth quarter and improvements in revenue and gross margin, the company's operating losses for the fourth quarter narrowed by 18.4%/35.0%, respectively, to 2.05 billion yuan. The corresponding bicycle loss was 34,000 yuan (operating profit/model sales volume), which improved 79,000/45,000 yuan, respectively.
New brands are about to be launched, and smart driving technology is being refined. The company's chairman and CEO He Xiaopeng recently revealed at the China Electric Vehicle 100 People's Conference Forum that Xiaopeng Motor will launch a new brand and enter the 10-15 thousand yuan car market. The brand's first model will be launched in the second half of 2024. The brand is committed to building “the first AI smart driving car for young people”, and Xiaopeng Motor will bring advanced intelligent driving capabilities to the 10-15 thousand yuan A-class car market. Furthermore, Xiaopeng Motor is speeding up the pace of model launches. According to He Xiaopeng, Xiaopeng Motor will launch more than 10 new models in the next three years. In addition to supporting globalized left-hand rudder and right-hand rudder models and upgraded facelift models, the total number of SOP models will be close to 30. Meanwhile, in 2024, Xiaopeng Motor will further expand its sales network coverage and accelerate channel sinking. It is planned that by the third quarter of this year, the number of sales stores will increase to 600.
Profit forecast and investment suggestions: Based on the company's 2023 performance and the company's latest situation, we adjusted the company's revenue forecast for 2024-2025 to 540 billion yuan (original net profit forecast was 53.3 billion/79 billion yuan), corresponding net profit forecasts for 2024-2025 to -6.9 billion yuan /- 800 million yuan, respectively (original net profit forecast was -6.4 billion/ -1.1 billion yuan), and added the company's 2026 revenue forecast to 102.6 billion yuan, and the corresponding net profit forecast to 3.4 billion yuan. The company is in a leading position in the field of intelligent driving in China. The launch of the new brand will reduce the company's intelligent driving technology. At the same time, cooperation with the public will also reduce the company's procurement costs. We maintain the company's “recommended” rating.
Risk warning: 1) The company's new car sales in 2024 fall short of expectations; 2) the improvement in gross margin falls short of expectations; 3) the company will still be in a state of loss in the short term, and the company's fundamentals may deteriorate.