Matters:
Xiaopeng Motor released its results report for the second quarter of 2024. In the second quarter of 2024, the company achieved operating income of 8.11 billion yuan, an increase of 60.2%/23.9%, respectively. The company's loss in the second quarter reached 1.28 billion yuan, narrowing by 54.2%/6.1%, respectively. By the end of the second quarter of 2024, the company's cash and cash equivalent reserves reached 37.33 billion yuan.
Ping An's point of view:
Gross margin continued to improve in the second quarter, and delivery guidelines for the third quarter exceeded expectations. The company delivered 30,207 new cars in the second quarter, an increase of 30.2%/38.4%, respectively. The company's automobile sales revenue reached 6.82 billion yuan in the second quarter, and the corresponding bicycle revenue was 0.226 million yuan, down 0.028 million yuan from the previous month. This was mainly due to the decline in X9's share in the sales structure and price reduction promotions. According to the company's financial report, the gross margin of the company's automobile sales business in the second quarter was 6.4%, up 15.0 percentage points from the previous year. The improvement in gross margin was mainly due to cost reduction and product portfolio improvement. The company's delivery guide for the third quarter of '24 is 0.041 million to 0.045 million units, up 2.5% to 12.5% year on year. Total revenue for the third quarter is expected to be 9.1 billion to 9.8 billion yuan, up 6.7% to 14.9% year on year. Combined with the company's sales guidelines, we expect the company's monthly delivery volume in September to be close to 0.02 million units, mainly due to the launch and delivery of the new model M03.
Revenue from technology research and development services in collaboration with the public has been growing steadily. The company's service and other revenue reached 1.29 billion yuan in the second quarter, up 102.5%/28.8%, respectively. This business growth is expected to be largely due to increased revenue from technology research and development services in cooperation with the public. Currently, the gross margin level of service and other revenue is high, reaching 54.3% in the second quarter. This has greatly increased the company's overall gross margin level. The company's overall gross margin reached 14.0% in the second quarter, up 17.9/1.1 percentage points from the same period last month, respectively. Currently, the company and Volkswagen technology research and development services mainly come from two aspects: the first is the two B-class electric vehicles developed based on the G9 platform and intelligent technology determined in July 2023; the second is the EEA electronic and electrical architecture technology strategic cooperation framework agreement signed between the company and Volkswagen Group in April 2024. The company and Volkswagen Group will jointly develop and integrate it into Volkswagen's CMP and MEB platforms in China based on the company's latest generation electronic and electrical architecture.
Expenses increased steadily in the second quarter, and losses narrowed sharply year over year. In terms of R&D expenses, the company's R&D expenses for the second quarter were 1.47 billion yuan, up 7.3%/8.6%, respectively. In terms of sales management expenses, the company's sales management expenses for the second quarter were 1.57 billion yuan, up 1.9%/13.3%, respectively. Due to the sharp increase in gross profit, the company's operating loss in the second quarter was 1.61 billion yuan, a year-on-year decrease of 47.9%.
The MONA M03 is about to be launched, and the P7+, which will be launched in the fourth quarter, will be equipped with a next-generation autonomous driving hardware platform. Starting at the end of August, the company will release two major models. Among them, the M03 will be officially launched on August 27 and large-scale delivery will begin. According to the company's third-quarter delivery guidelines, the M03 is expected to sell around 0.01 million units in September. In the fourth quarter, the company will also launch the P7+ model, which will be equipped with a next-generation autonomous driving hardware platform, and its hardware cost will drop drastically. He Xiaopeng anticipates that deliveries in the third and fourth quarters will increase significantly from month to month, and reach a new high delivery volume in the fourth quarter.
Profit forecast and investment advice: Based on the company's first half results and the company's third quarter delivery guidelines, we adjusted the company's 2024-2026 revenue forecast to 41.1 billion/62 billion/94.4 billion yuan (the original revenue forecast was 43.8 billion/68.1 billion/101.8 billion yuan), corresponding to the 2024-2026 net profit forecast of -6.3 billion/-2.9 billion/, respectively +0.4 billion yuan (original net profit forecast was -6.2 billion/-0.7 billion/+2 billion yuan). The company is in a leading position in the country in the field of intelligent driving. Cooperation with Volkswagen will also speed up the company's intelligent technology output. It is optimistic that the company's new models will improve the company's sales volume in the second half of the year, and still 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.