Intelligence is gradually becoming an important decision-making factor in consumers' car purchases, and technology leaders can be expected to fully enjoy the dividends of the transformation period as intelligent driving continues to be upgraded. The company's smart driving technology is leading, and the model strategy focuses on “fashionable smart electric”, which is expected to become a leader in smart cars. Sales volume is currently the most important factor in smart car investment. Intelligent driving is currently in a period of accelerated popularity, and scale is needed to raise user awareness, form market reputation, and accelerate data accumulation. Xiaopeng fully launched XOS 5.2.0 on July 30. XNGP was upgraded to be easy to use throughout the country, and intelligent driving continues to lead.
With channel changes and the strengthening of the marketing system, the company's sales volume is expected to increase steadily. MONA went public on August 27 to begin the company's new car cycle. The effects of scale improvement, platform and technology cost reduction will be further reflected. The business model expansion combined with software profits continues to grow, and the company's future profits are highly flexible. The company's revenue in 2024 is estimated to be 41.2 billion yuan, corresponding to PS1.3X. 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. The subsequent implementation progress of the city's NOA fell short of expectations. Leading advanced intelligent driving assistance technology is one of the company's important competitiveness. Currently, the implementation of urban NOA scenes still relies on high-precision map coverage, so it can only be achieved in specific cities. Various OEMs are actively promoting the development of “pictureless” NOA, thereby expanding the scope of application of advanced intelligent assisted driving. If the subsequent implementation of the company's urban NOA falls short of expectations, it will have a great impact on the company's competitiveness.
2. Competition intensified, and new car sales fell short of expectations. The company focuses on the mid-to-high-end smart electric market. As market competition intensifies, there is a risk that new car sales will be underestimated due to the increase in competing models, which in turn will affect the company's financial performance.
3. Sales of new energy vehicles are lower than expected due to weak market demand. The company's main revenue and profit comes from sales of new energy vehicles. Automobile sales are affected by macroeconomics and residents' purchasing power, and subsequent recovery in demand may have an impact on NEV sales.
4. The cost reduction of power batteries fell short of expectations. Batteries and battery raw materials account for a relatively high share of the cost of electric vehicles. The price of lithium carbonate has a big impact on the cost of electric vehicles, so price fluctuations will cause fluctuations in the company's profitability. Since 2023, the price of lithium carbonate has declined, but if the price rebounds in the future, it may adversely affect the company's profitability.