Incidents:
On August 20, 2024, Xiaopeng Motor released its financial report for the second quarter of 2024:2024Q2's total revenue was 8.11 billion yuan, up 60.2% year on year and 23.9% month on month. Of this, vehicle revenue was 6.82 billion yuan, or +54.1%/+23.0% YoY. Net loss due to mother was 1.28 billion yuan, net loss for the same period in 2023 was 2.8 billion yuan; NON GAAP net loss was 1.22 billion yuan, compared to 2.67 billion yuan for the same period in 2023, and the loss narrowed. The gross profit margin was 14.0%, up 17.9pct from the same period in 2023.
The company delivered 30,207 vehicles in 2024Q2, up 30% year on year and 38% month on month.
Investment highlights:
2024Q2 net loss narrowed, and gross margin increased for the fourth consecutive quarter. 2024Q2 achieved revenue of 8.11 billion yuan, of which vehicle revenue was 6.82 billion yuan, of which vehicle revenue was +54.1%/+23.0% month-on-month. The year-on-month increase was mainly due to increased deliveries in the second quarter of 2024; service and other revenue was 1.29 billion yuan, or +102.5%/+28.8% month-on-month. The increase was mainly due to increased sales of maintenance services, as well as strategic technical cooperation with platforms and software Increased revenue from technology research and development services. 2024Q2 operating profit loss was 1.61 billion yuan, with a loss of 47.9%/2.4%, net profit loss to mother of 1.28 billion yuan, narrowing of 54.3%/6.6% month-on-month; gross margin was 14%, +17.9pct/+1.1pct, automobile gross margin 6.4%, and the month-on-month ratio was +15pct/+0.9pct. Expenses: Sales and general administrative expenses were $1.57 billion, or +1.9%/+13.3% month-on-month. The main reason for the month-on-month increase was increased commissions paid to franchisees and increased marketing and advertising expenses; R&D expenses were 1.47 billion yuan, or +7.3%/+8.6% month-on-month. Thanks to the realization of technology cost reductions and technology monetization revenue from public strategic cooperation, 2024Q2's gross margin was further raised to 14.0%.
Intelligent driving capabilities continue to improve, and large end-to-end models are being promoted at an accelerated pace. The company's smart driving technology continues to innovate, and product competitiveness continues to improve. In May, the company released the first large-scale end-to-end autonomous driving model for mass production in China, and the world's first AI chauffeur service. On July 30, Xiaopeng Motor held a press conference on AI smart driving technology. The AI Tianji system XOS 5.2.0 ushered in a comprehensive upgrade. Through extensive testing and training of end-to-end models, the Xiaopeng XNGP was optimized to be “easy to use all over the country”; at the same time, a smart cockpit was created to open up smart scenarios and the Apple system, taking into account convenient and fun driving. On August 8, Xiaopeng MONA M03 opens pre-orders.
The sales service system has been upgraded, and business expectations are optimistic. As of June 30, 2024, the company has 611 sales stores, covering 185 cities across the country; Xiaopeng has 1,298 self-operated charging stations, including 442 S4 ultra-fast charging stations. 2024Q3's estimated delivery volume is 4.1w~4.5w, +2.5% ~ +12.5%/+35.7% ~ +49.0% YoY, total revenue of 9.1 billion yuan to 9.8 billion yuan, and +6.7% ~ +14.9%/+12.2% ~ +20.8% YoY.
The process of going out to sea continues to accelerate, and technical cooperation continues to advance. 1) The company's overseas expansion process was accelerated, and it was announced that it will enter markets such as Germany, France, Thailand, Singapore, Malaysia, Hong Kong, China, Macau, Australia, etc., and the overseas sales plan will expand to more than 20 countries and regions. As of July, Xiaopeng Motor has entered 30 countries and regions, including Europe, the Middle East, and Latin America, and has more than 70 sales stores overseas. 2) In April, an EEA electronic and electrical architecture technology strategic cooperation framework agreement was signed with Volkswagen Group. It is expected to be applied to Volkswagen brand electric models manufactured in China from 2026, and revenue is expected to be included in the second half of 2024.
The profit forecasting and investment rating company's gross margin improved to 14% in 2024Q2; a large model of end-to-end autonomous driving was released, and smart driving capabilities were further improved; and reservations for the new MONA model began in 2024Q3. The company's revenue forecast for 2024-2026 was lowered to 41.2, 71.7, and 94.1 billion yuan, with year-on-year growth rates of 34%, 74%, and 31%; net profit to mother was -5.7, -1.8, and 0.4 billion yuan. The corresponding EPS is -3.0, -0.9, and 0.2 yuan. The PS valuation corresponding to the current stock price is 1.3, 0.7, and 0.6 times, respectively, maintaining a “buy” rating.
Risks suggest that NEV sales are growing less than expected; competition in the automotive industry intensifies risks; the new vehicle development process falls short of expectations; competition in market segments increases risks; and the progress of intelligent development falls short of expectations.