[Core conclusion] The company's revenue for 2024-2026 is estimated to be 42.9 billion yuan, 81.3 billion yuan, and 108.6 billion yuan, respectively, up 40%, 89%, and 34% year-on-year, respectively; net profit to mother is -6.8 billion yuan, -2.3 billion yuan, and 2.3 billion yuan, respectively. The current stock price corresponding to 2024-2026 PS is 2.34/1.23/0.92 times, respectively. Covered for the first time, a “gain” rating was given.

[Report Highlights] The market is worried that Xiaopeng's new car is similar to previous products and is not sustainable in terms of sales.

We believe that the super product cycle started by Xiaopeng this time is quite different from the previous one. First, the pace of new car launches is faster, and second, the M03 is the first product, and the product strength has changed significantly. Furthermore, the steady progress of cooperation between Xiaopeng and Volkswagen and the rapid increase in overseas deliveries will also contribute greatly to the company's overall revenue growth and gross margin increase.

Main logic 1: Xiaopeng Motor starts the super product cycle. Beginning in the 3rd quarter of 2024, the pace of new Xiaopeng car releases accelerated markedly. From 1-2 new cars in the past year to “planning about 30 new products or modifications within 3 years”, this also indicates that Xiaopeng Motor has begun a very strong new product cycle starting with the MONA M03. Judging from the product strength of the new car, the M03 has outstanding highlights in various aspects such as product positioning, price, appearance, and smart driving. Currently, it has become a best-selling model with a price of 0.15 million. The recently launched P7+ is also worth looking forward to as the world's first AI car.

Main logic 2: Leading smart driving technology, steady progress in cooperation with the public. Xiaopeng Motor's product features leading smart driving technology, and the progress of smart driving in the city is at the forefront of the industry. Revenue related to 2024H1's cooperation with Volkswagen's software platform was confirmed for the first time, increasing the company's overall gross margin while also opening up a new growth model for implementing smart driving technology.

Main logic 3: Accelerate the development of overseas markets. In 2024, H1 Xiaopeng has established cooperative relationships with leading dealer groups in Western Europe, Southeast Asia, the Middle East, Australia, etc. Overseas deliveries increased from 483 vehicles in 2021 to 3,413 vehicles in 2024H1. It is expected that it will continue to grow rapidly as overseas layout accelerates.

Risk warning: Competition in the industry intensifies, the risk that the company's sales volume falls short of expectations; the risk that the super product cycle falls short of expectations; the risk that intelligent driving is not progressing as much as expected; the risk that new technology is progressing less than expected; exchange rate risk, etc.