Description of the event
In the first quarter of 2024, the company achieved revenue of 6.548 billion yuan, +62.35% year-on-year, with a net loss of 1,368 billion yuan. The loss narrowed sharply. The non-GAAP net loss was 1.41 billion yuan, and the loss narrowed by 802 million yuan year-on-year.
Incident comments
The company's revenue performance in the first quarter was better than expected. Driven by X9 sales and mass service revenue, the gross margin reached 12.89%, which greatly exceeded expectations. The company launched X9 in the first quarter, and bicycle revenue increased significantly month-on-month, and gross margin improved. The automobile business revenue was 5.54 billion yuan, +57.8% year on year, delivery volume was 21,800 vehicles, +19.7% year on year, and bicycle revenue was 254,000 yuan, +31.8% year on year, and 25% month on month. Judging from the delivery volume structure, the X9 delivered 7,872 vehicles, accounting for 36.1%, which led to a significant increase in bicycle revenue. The gross margin of the automobile business was 5.5%, +7.9pct year over year, and +1.4pct month-on-month. The overall scale effect declined in the first quarter. At the same time, due to P5 EOP related inventory impairment and loss of procurement commitments, had a negative impact of 3.2 percentage points on the gross margin of automobiles in the first quarter, but the volume of the X9 significantly improved the gross profit margin of the model. On the cost side, the company's R&D expenditure in the first quarter was 1.35 billion yuan, up 4.2% year on year, up 3.3% month on month, and the R&D expense ratio was 20.6%. S&G was 1.39 billion yuan, a slight increase of 0.1% over the previous year, and the S&G fee ratio was 21.2%. The cost of 2023Q4 was 1.94 billion yuan, and 2024Q1 decreased by 28.3% month-on-month. The quarterly decline was mainly due to lower commissions paid to franchisees and lower marketing, promotion and advertising expenses. The estimated annual R&D expenses are 7-7.5 billion yuan.
Mass service revenue has begun to be confirmed, and the gross profit margin of the service business has been greatly increased. Strategic cooperation with Volkswagen continues to be upgraded, the technology monetization business model is running smoothly, and high gross margin revenue has led to significant increases. The company's service revenue for the first quarter was 1.03 billion yuan, +93.1% year-on-year and +22.1% month-on-month. The gross margin of the service business was 53.9%, +24.3pct year over year, and +15.7pct month-on-month.
The high gross margin of the mass service business greatly increased the overall gross profit margin of the service business. Looking ahead, mass service revenue will contribute steadily every quarter in the future, while EEA revenue will begin to be confirmed in the second half of the year, which is expected to further increase service business revenue and growth.
Smart driving pioneers took the lead in mass production of large models, and technology leaders are expected to fully enjoy the dividends of the transformation period as intelligent driving continues to be upgraded. On May 20, Xiaopeng began full promotion of the 5.1 version of the smart driving end-to-end model. By the second half of the year, it will be used on all roads without a map across the country, and intelligent driving will continue to lead the way. With channel changes and the strengthening of the marketing system, the company's sales volume is expected to increase steadily. The company expects to deliver 29,000-32,000 vehicles in 2024Q2, with expected revenue of 75-8.3 billion yuan, +48.1%-63.9% year-on-year. The MONA model is expected to be launched in June, and delivery will begin in the third quarter. F57 is expected to land in the fourth quarter. With the release of two new cars and the beginning of a new cycle of new cars, the company is expected to achieve a significant increase in sales in the fourth quarter. With the increase in scale, the effects of platform and technology cost reduction will be further reflected. Combined with the expansion of the business model for future software profits, the company's future profits will also be highly flexible. The company's total sales volume in 2024 is estimated to be 195,000 vehicles, with corresponding revenue of 46.3 billion yuan. Volkswagen Software's revenue reflects significant improvements in financial performance. The company is expected to enter an inflection point in the new car cycle and give it a “buy” rating.
Risk warning
1. Economic recovery is weaker than expected;
2. Increased competition in the industry weakens corporate profits.