In 2020, the development of domestic car-building "new forces" has ushered in a watershed, and head car companies have increasingly become popular in the eyes of capital. Under this background, XPeng Inc. went to the United States for listing and, together with NIO Inc. and Li Auto Inc., completed the build-up of the domestic "three new forces of car building" in the US stock market.

Zhitong Financial APP learned that XPeng Inc. (XPEV.US) formally submitted IPO documents to the US SEC on Aug. 7, applying for listing on the New York Stock Exchange. Credit Suisse, JPMorgan Chase & Co and Bank of America Merrill Lynch will act as underwriters for the IPO.

Similar to NIO Inc. and Li Auto Inc., XPeng Inc. chose US stocks because of its market recognition of the value of the smart electric vehicle industry represented by Tesla, Inc., which may effectively reduce XPeng Inc. 's market education costs.

With the development potential of the domestic intelligent electric vehicle industry in the future, steady research and development and market investment, as well as sufficient financial protection, XPeng Inc. is expected to get a full release of value in the US stock market.

Excellent internal strength rejects "PPT car building"

In 2018, Jia Yueting's Letv car-building bubble burst. It has also cast a shadow over the development of the domestic intelligent electric vehicle industry, so that the capital market once shunned the concept of "new power of car building".

After Jia Yueting, "refusing to build PPT cars" has become one of the important bases for the valuation of the domestic smart electric vehicle industry. As one of the few leading enterprises that have broken through the competition in the industry, XPeng Inc. naturally has excellent internal strength.

In terms of overall revenue, XPeng Inc. earned 9.706 million yuan in 2018, but after car sales started, the company's revenue reached 2.321 billion yuan in 2019 and 1.002 billion yuan in the first half of this year.

Behind the substantial increase in revenue is XPeng Inc. 's growing delivery of new cars. Zhitong Financial APP learned that XPeng Inc. uses the qualification of Haima Automobile to make G3 models, which are made in Zhengzhou, Henan Province. At present, the seahorse factory in Zhengzhou has an annual production capacity of 150000 vehicles, supplying most of XPeng Inc. 's current production capacity.

Prior to this, XPeng Inc. 's sales mainly came from the G3, which was the top three best-selling electric SUV in China in 2019. In terms of sales volume, the first-sale delivery of the G3 reached 6723 vehicles in the Q2 quarter of 2019, with the company's total sales of 7165 vehicles. The sales concentrated on previous orders in 2018 and the first quarter of 2019, resulting in a high delivery base.

In the first half of this year, after digesting previous orders, XPeng Inc. 's sales returned to normal and reached 5489 vehicles steadily. It is worth noting that XPeng Inc. also set up an automobile factory in Zhaoqing, Guangdong, with a production capacity of 100000 vehicles. The factory has been producing the latest model, the XPeng Inc. P7, since May this year.

In terms of overall delivery, XPeng Inc. has delivered 18741 G3 models and 1966 P7 models as of July 31 this year. This brings the current overall delivery volume of XPeng Inc. to 20707. In addition, XPeng Inc. also plans to launch a third model next year to expand the product lineup.

Different from the logic of mature traditional car companies focusing on the market, XPeng Inc., which is involved in the intelligent industry, a large part of its valuation weight comes from research and development. The reason why XPeng Inc. 's products can be recognized by the consumer market in the short term has something to do with its focus on R & D investment.

According to the prospectus, XPeng Inc. 's R & D expenses from 2018 to the first half of this year were 1.05 billion yuan, 2.07 billion yuan and 630 million yuan respectively, of which R & D expenses accounted for 89.2% of the company's total revenue in 2019.

In terms of R & D team configuration, at present, 43% of XPeng Inc. 's 3676 employees are R & D personnel, mainly in the fields of automotive design and engineering, self-driving technology and intelligent operating systems. They account for 66%, 17% and 17% of the total number of R & D personnel, respectively.

It can be seen that the current research and development of XPeng Inc. is still focused on the basic field of automobile design, which not only improves the quality of the car, but also carries out intelligent extended design of the car. This steady R & D style also reflects XPeng Inc. 's grasp of the rigid demand of the consumer market from the side.

From the perspective of income and research and development, XPeng Inc. of the "new generation" has gradually stepped onto the right track of development. With the recognition of the development potential of the intelligent electric vehicle market and the market's higher valuation of leading enterprises such as Tesla, Inc., the intrinsic value of XPeng Inc. is easier to find.

Catch up with Tesla, Inc. 's footsteps

In recent years, smart electric vehicles are favored by capital, to a large extent, due to Tesla, Inc. 's "halo blessing", but under this halo, the voice of domestic smart electric vehicles has begun to be paid more and more attention by the market.

From the market level, the current development of the pure electric vehicle market tends to be positive, stepping into the market acceleration period, with technology upgrading and accelerating the elimination of technologically backward enterprises, the market will continue to be in the incremental market.

According to historical market ownership and sales data, as of June last year, the number of new energy vehicles in China reached 3.44 million, accounting for 1.4 percent of the total, of which 2.81 million were pure electric vehicles, accounting for 82 percent of the total new energy vehicles. From January to May this year, sales of new energy vehicles reached 289000, of which 222000 were pure electric vehicles, accounting for 76.8 percent.

It is worth noting that the proportion of pure electric vehicles in the sales of new energy vehicles has always been the highest, which reflects the great potential of the market.

In addition, in the construction of supporting facilities, by May 2020, the total number of charging piles in the country had reached 1.299 million, an increase of 539000 over the previous year; at the same time, the number of registered power exchange enterprises increased from more than 5000 in 2018 to more than 10000 in 2020.

In addition, according to the national new energy vehicle development plan, the investment in recharging equipment has been brought into the scope of the new infrastructure, and the policy encourages to continue to increase the construction of recharging infrastructure and the interconnection of all kinds of recharging facilities. There is no doubt that the follow-up construction of supporting facilities will also help the further expansion of the pure electric vehicle market.

In the field of pure electric vehicles, XPeng Inc. targets Tesla, Inc. at the middle and high end of the market.

In the prospectus, XPeng Inc. defines the passenger car market with a price range of 15-500000 as a mid-and high-end market. At present, the standard life and upgrade price of Tesla, Inc. 's highest-selling model, model 3, is 270000 yuan, which is in line with the price definition of medium-and high-end cars.

The prices of XPeng Inc. 's two current models are basically in the middle-and high-end range, with the subsidised price of the G3 ranging from 146800 yuan to 199800 yuan and the relatively higher price of the P7 from 229900 yuan to 349900 yuan.

Unlike NIO Inc. 's positioning luxury car, the ideal growth program is different, XPeng Inc., who follows the market and focuses on the middle and high end, seems to be more "pragmatic".

Data show that electric vehicle sales in China reached 893700 in 2019, with a penetration rate of 4.2 per cent in the Chinese passenger car market. But by 2025, electric vehicle sales will reach 4.2 million, and its penetration will increase to 16.2%, with a compound annual growth rate of 29.4%.

In the electric car market, mid-and high-end electric vehicles accounted for 47.2% of all electric vehicle sales in 2019. This is undoubtedly a large market increment, and XPeng Inc. is one of the most powerful competitors in this market. It is precisely for this reason that XPeng Inc. set the long-term target market capitalization after IPO at 40 billion US dollars.

This may lead to the restructuring of the global smart electric vehicle market. APP learned that Munster, managing partner of venture capital firm Loup Ventures, once said in a report on Tesla, Inc.: "the root of Tesla, Inc. 's business miracle is that he has basically operated in a non-competitive environment for several years. "after XPeng Inc. and NIO Inc., and the ideal in the United States, there may be a wonderful performance of" three British battles against Lv Bu "in the future.