The 2025 facelift and new vehicle matrices are rich. Marketing, supply chain cost reduction, and ADAS comprehensive strength strengthening are based on M03 and P7+ continuously exceeding expectations, showing that the company's product definition and marketing capabilities have improved to drive a brighter future sales outlook. We raised our 2024-2026 revenue from 41.09/63.34/77.07 billion yuan to 41.76/84.05/104.03 billion yuan. Based on the intensive release of new vehicles driving the expansion of operating expenses, we lowered our 2024-2026 non-GAAP net profit from -5.27/-0.38/1.81 billion yuan to -5.46/-2.81/0.207 billion yuan, and the corresponding adjusted EPS was -2.9/-1.5-0.1 yuan. The current stock price of HK$59.55 corresponds to 2.5/1.3/1.0 times PS in 2024-2026. Xiaopeng is expected to achieve better relative performance, and it is recommended to actively pay attention to the 2025Q1 off-season layout opportunities; considering that M03 and P7+ are expected to return to the upward trend of new orders around 2025Q2, and that the facelift and new car launch window are expected to drive the market to revise its 2025 sales expectations again, continuous iteration of the end-to-end model is expected to further strengthen Xiaopeng Motor's intelligent advantage and maintain the “gain” rating.

M03 and P7+ were launched one after another, confirming that the company's product definition and marketing capabilities effectively improved the M03 by more than 0.03 million in 48 hours, and Dading surpassed 0.031 million on the first day of the P7+ listing. Looking at the product side, the M03 is a rare all-electric coupe with a price range of 0.12-0.16 million focusing on the C-end, female positioning, and large space. Compared with the B-side Qin Plus, it has superior appearance and intelligence, and has a lot of space compared to dolphins. The P7+ is a coupe model with a price of 0.18-0.22 million, which is one of the few positioned young family users to take into account their needs for comfortable space, stylish appearance, and intelligence. From the marketing side, the company's high-frequency warm-up activities, Internet new media marketing, and public opinion guide users' ability to occupy their minds.

Steady monthly sales of M03 and P7+ are still divided. Starting with 2025Q2, the M03 and P7+ delivery cycle is expected to rise again, and the M03 and P7+ delivery cycle is too long, and users in this price segment are strongly demanding car subsidies before the end of 2024, or cause the momentum of new orders to weaken marginally in the short term. We believe that M03 and P7+ are expected to return to the upward trend of new orders around 2025Q2, respectively. The model matrix for the 2025 facelift models and new cars is rich. The power type may include the “Kunpeng” super electric system. The pure electric battery life is 430 km, and the comprehensive battery life of 1,400 km is significantly higher than traditional range-extension platforms. The end-to-end model continues to be iterated. The Ultra version is in the development process. It is equipped with 3000 TOPS computing power and fully redundant software and hardware configurations, gradually transitioning from partially unmanned to completely unmanned robotaxi, thus further strengthening Xiaopeng Motor's intelligent advantages.

Risk warning: Product launches fall short of expectations, production capacity and supply chain risks, and increased industry competition.