Using one word to describe the trend in the automobile industry this year, it is unquestionably still a “volume”. From the beginning of the price war at the beginning of the year to the competition configuration of hundreds of new cars at the Beijing Auto Show, competition among car companies has become more and more intense.
However, there is always limited room for downward movement, and the room for upward development is often limitless. Previously, Xiaopeng Motor (XPEV.US/9868.HK, hereinafter referred to as Xiaopeng) released its latest 2024 Q1 financial report, which illustrates this very well.
Core indicators have increased dramatically, and the upward cycle has gradually become clear
As can be seen from Xiaopeng's latest financial report, its core business indicators for Q1 have improved dramatically.In terms of revenue, Xiaopeng achieved revenue of 6.55 billion yuan in Q1 in 2024, an increase of 62.3% over the previous year. Looking at it broadly, automobile sales revenue was 5.5 billion yuan, up 58% year on year; service and other revenue was 1 billion yuan, up 93% year on year, and all parts of the business performed very well.
whereasIn terms of gross margin, which the market is most concerned about, Xiaopeng achieved exponential growth in Q1It has broken the capital market's general lack of confidence in the profitability of NEV companies. Xiaopeng's gross margin for Q1 in 2024 was 12.9%, a significant increase of 6.7 percentage points from 6.2% in the previous quarter.
The reason for this, firstIt is inseparable from the scale effect brought about by Xiaopeng's steady increase in delivery volume, cost reduction, and the increase in the proportion of high-end models, which has led to continuous optimization of the product structure.In 2024, Xiaopeng delivered 22,000 units in Q1, an increase of 20% over the previous year. Of these, X9 delivered a total of 80,000 units, accounting for 36% of total sales.
It can be seen from this that in the fierce market competition, Xiaopeng's products are becoming more and more attractive to consumers. Furthermore, in the context of serious product homogenization within the industry, new products have shown differentiated competitiveness that distinguishes them from competition, so they can quickly stabilize the market, and the quality of operations has been continuously improved as a result.
Reasonable inferences can be made based on changing trends in performance,Xiaopeng's business health is likely to have entered an upward cycle of “from valley to peak”, gradually getting rid of the development difficulties it had fallen into in the past. This is a pretty positive sign for capital markets, where it's easier to smell value opportunities ahead of time.
Next, we can look forward to it,After experiencing changes in organizational management capabilities, Xiaopeng will accelerate the results of more reforms.Entering the third year of “second entrepreneurship”, Xiaopeng has gradually developed various aspects such as organizational structure, channel side, user side, talent introduction, and R&D systemMaking up for the shortcoming, and also amplifying the longboardIt is estimated that the investment in intelligent R&D will reach 3.5 billion yuan this year.
In this way, Xiaopeng has reduced costs and increased efficiency in business operations, and continues to expand his leading edge in smart driving and other fields. incarnationAt the performance level, Xiaopeng may be able to accelerate the leveraging of a larger and newer profit market.
Continued breakthroughs in technology research and development and implementation to support continuous improvement in profitability
Since last year, Xiaopeng has achieved multiple breakthroughs with his accumulation and advantages at the technical level.
First, in the context of the increasing intensity of industry knockouts, Xiaopeng is using platform-based R&D and technological innovation to further “save” costs. Also, after being recognized by Volkswagen Group with its technical advantages, continuing to use supply chain capabilities to reasonably reduce platform costs will all drive Xiaopeng's subsequent gross margin increase.
More importantly, deepening cooperation with the public,Xiaopeng has extended more value through technology, explored a new business model, and embarked on a “technology monetization” development path.It can also be seen in the latest financial report that services and other revenues have grown rapidly, and technical service revenues of up to hundreds of millions of yuan have already been determined. While improving short-term profitability, it has also opened up a long-term ceiling. Revenue from such “platform and software technology services” will become Xiaopeng's regular income.
Therefore, the author also discovered that in the process of technology implementation, Xiaopeng actually did not fall into the “path dependency” commonly found in technology companies. Previously, in terms of the strategic direction of car building, Apple fell into path dependency. It relied too much on the ICT industry's successful model, didn't have a strong enough leader, and didn't break out of its own comfort zone for success. However, on the other hand, Xiaopeng is bold enough.
It is worth noting that Xiaopeng held AI DAY on May 20 this year to announce mass production and launch of large end-to-end models. At the same time, the AI Tianji system was fully promoted to users, starting the AI smart driving era. In this year's Q1 earnings conference call, He Xiaopeng mentioned that starting with delivery of new cars in the fourth quarter of this year, more users will be able to enjoy Xiaopeng's premium XNGP service, which will greatly accelerate the popularity of advanced smart driving.
This means that Xiaopeng continues to maintain its technological leadership. After accelerating the popularization of advanced smart driving in the future, the competitiveness of Xiaopeng products will be further strengthened. Not onlyXiaopeng's current models will also be the first to benefit from the new products released this year, showing a unique competitive advantage in the second half of intelligent electric vehicles.
He Xiaopeng pointed out in the earnings conference call that starting from the third quarter of this year, Xiaopeng will begin a cycle of launching a variety of new strong products within three years, which will cover major market segments in the 100,000 to 400,000 price range. The first A-class electric sedan in the MONA product series will be unveiled in June of this year, and will be officially launched and delivered on a large scale in the third quarter. It will become a superstar product within 200,000 yuan. In the fourth quarter of this year, Xiaopeng will also deliver a new B-class pure electric sedan model from the Xiaopeng Motor brand.
From the perspective of industry development,As advanced smart driving accelerates into an inflection point in the industry, and the sinking market becomes a key competition point. Relying on deep technical reserves and strength, Xiaopeng's new products are expected to usher in opportunities in competition and stabilize Xiaopeng's market position.
After waiting for the production capacity of the new products to be fully released, the company will show a stronger scale effect in business operations. Coupled with the company's advantages in technology research and development and industrial chain layout, the cost of new products has been further reduced.Xiaopeng is expected to open up wider profit margins.
Summarizing:
Combining various aspects such as technological innovation, product launch, and performance growth, it continued to send positive signals until the first quarter of 2024. From this, it seems that the trend of Xiaopeng Motor entering an upward cycle is clear. The stock price performance after the release of the latest results also confirms this.
By the end of the first quarter of this year, Xiaopeng's cash on hand reached 41.4 billion yuan, which will support it in developing a more long-term strategic layout in the future upward cycle. In this case, Xiaopeng Motor's valuation is expected to reach a new high. The future will bring more surprises to investors, which is worth looking forward to in the market.