Key investment points: On November 19, the company disclosed its 2024 three-quarter report. In the first three quarters, it achieved total sales volume of 0.099 million vehicles, +21.0% year over year; total revenue of 24.76 billion yuan, +40.5% year over year; gross profit margin of 14.2%, +16.3 pct year on year; net profit to mother -4.46 billion yuan, a year-on-year loss of 4.57 billion yuan. 24Q3 achieved total sales volume of 0.047 million vehicles, +16.3/ 54.0%; total revenue of 10.1 billion yuan, +18.4/ 24.5% month-on-month; gross profit margin of 15.3%, +17.9/1.3 pct; net profit to mother -1.81 billion yuan, loss reduced by 2.08/0.52 billion yuan YoY. Xiaopeng Motor's third-quarter results were in line with expectations, and gross margin improved steadily.

The release of major new cars has led to rapid growth in sales. On August 27, the Xiaopeng MONA M03 was launched and delivered. Smart Driving was devolved to the 0.1-0.15 million yuan price range. With its excellent product strength and cost performance ratio, it obtained excellent orders. With its excellent product strength and cost performance ratio, the large quantity exceeded 0.03 million units in 48 hours, and the fixed quantity was close to 0.05 million units within 72 hours of listing. At the same time, with full preparation and early production in the supply chain, sales volume exceeded 10,000 in the first complete month after listing, driving a significant month-on-month increase in overall sales in the third quarter. Due to the low price of MONA M03 products and limited-time discounts on models such as the X9 in the third quarter, bicycle revenue was 0.189 million yuan, or -3.6/ -16.3% month-on-month.

Cost reduction continued to be promoted, and profitability further improved in the third quarter. Bicycle revenue declined in the third quarter, but the gross margin of automobile sales increased from 6.4% in the second quarter to 8.6%, +2.2pct month-on-month. This is mainly due to the company's continued cost reduction, the decline in supply chain costs, compounded by rapid month-on-month sales growth in the third quarter, and a further increase in capacity utilization. Service revenue increased from 1.29 billion yuan to 1.31 billion yuan, +1.1% month-on-month, gross margin increased from 54.0% to 60.0%, and +6.0pct month-on-month. Mainly on July 22, Xiaopeng and Volkswagen Group signed a joint development agreement on electronic and electrical architecture technology strategic cooperation. The cooperation began charging technical licensing fees in the third quarter, driving a further increase in the gross margin of service revenue in the third quarter. With the gross margin of automobile sales and service revenue rising at the same time, the overall gross margin increased rapidly from month to month.

The new model cycle has begun, and there is significant potential for sales growth. Xiaopeng Motor launched the all-electric sedan model P7+ on November 7. It definitely surpassed 10,000 units in 12 minutes. Pre-sale began in 1 hour and 48 minutes, and orders have already exceeded 30,000 units. The P7+ is the first model after cost reduction. While achieving high sales volume, the model is expected to maintain strong profitability. Subsequent technical solutions are expected to migrate to 25 facelift models, and the migration of technical solutions is also expected to drive a jump in overall model profitability. Q4 The company's quarterly delivery guide was 0.087-0.091 million vehicles, achieving total revenue of 15.3-16.2 billion yuan, and quarterly delivery guidelines reached a record high.

Going overseas is accelerating, and it is expected to become the second growth curve. Since this year, Xiaopeng Motors has significantly accelerated the pace of going overseas, and has accelerated its deployment in many European countries and Southeast Asia. On August 21, Xiaopeng Motors held a press conference in Bangkok, Thailand. The right-hand drive version of the Xiaopeng G6, which was launched this time, is also the first model launched by Xiaopeng Motor in the Thai market. Following the launch in Thailand, Xiaopeng Motor will also launch the Xiaopeng G6 in Malaysia, and will successively enter markets such as Singapore and Australia. Overseas sales increased 70% month-on-month in the third quarter, accounting for 15% of the company's total sales. The rapid entry into overseas markets is expected to contribute to considerable profitability in the future.

Profit forecasting and valuation. The company's new car sales were strong, the progress of external cooperation and internal reforms exceeded expectations, and profitability was greatly enhanced. We raised 24-26 revenue from 38.2/62.7/81.2 billion yuan to 40.8/78.9/101.3 billion yuan; raised 24-26 net profit to mother from -62/-12/+0.4 billion yuan to -59/-9/+1.5 billion yuan, maintaining the “buy” rating.

Risk warning: Competition for new energy vehicles has intensified, raw material prices have fluctuated, and the company's net profit has not been corrected.