CICC released a research report stating that it maintains a 'outperform industry' rating for Xpeng-W (09868), maintaining profit forecasts for 2024/25. Considering the recent improvement in sector valuation and the company's product cycle realization, the Hong Kong stock target price was raised by 22% to HKD 55. The company recently held consecutive communication meetings on the intelligent driving and three-electric technology of the P7+ model, with the view that the P7+ has industry-leading intelligent driving functions and high endurance with low energy consumption. The P7+ is expected to drive sales growth for the company after its listing. At the current point in time, the bank believes that the company has a good investment opportunity.

CICC's main points are as follows:

Steady 3Q sales volume, performance expected to continue to improve.

The company's sales volume in Q3 was 46,533 vehicles, up 15.0% month-on-month. The performance of the M03 model was strong, with a cumulative delivery of 10,540 vehicles since its listing on August 27. From a performance perspective, although there has been a slight decline in the product structure compared to the previous quarter, Q3 overall scale is improving. The bank expects cost reductions in the supply chain to materialize, and income from the Volkswagen EEA architecture collaboration is also planned to be included in the financial statements starting in Q3. However, considering the company's recent new models and intelligent driving structure, expenses may be relatively rigid. It is recommended to maintain a conservative expectation for Q3 performance. The bank expects Q4 sales volume and financial statements to see a larger improvement.

Adopting a pure vision technology route, leading smart driving capabilities in the same class.

In terms of asiavets, the P7+ debuts with AI MediaTek 5.4.0, which can fully use end-to-end large models without distinction between scenes. In terms of algo, the P7+ supports intelligent driving in all scenarios and full-scene parking. The human-like improvement in smart driving is quadrupled, and the parking success rate of smart parking is increased by 20%. In addition, the P7+ uses a pure vision solution, with its AI eagle-eye vision solution adopting a single-pixel LOFIC architecture solution, which can achieve stronger information collection capabilities in backlight, high light difference, dark light, and other environments. Furthermore, this architecture solution significantly enhances the visual perception range, allowing clear resolution of semantic information.

Excellent energy consumption performance, P7+ has the potential for mass production.

In terms of the three-electric aspects, the P7+ has an energy consumption of 11.6 kWh per 100 km, and the CLTC range can reach 710 km. The main reason is that the company has increased its investment in design and manufacturing, three-electric management, thermal management, and driving control, driving the improvement in endurance. Specifically, the P7+ has a drag coefficient of Cd.

0.206, driving range increased by 23.3 kilometers; equipped with efficient triple energy management, all models come standard with 800V super electric drive system, driving range increased by 10 kilometers; equipped with X-HP.

3.0 asia vets thermal management, driving range increased by 26 kilometers; P7+ has precise driving control capabilities, covering manual driving and asia vets driving, driving range increased by 17.6 kilometers. Overall, the industry believes that the P7+ is expected to drive the company into a larger market potential of 0.2 million yuan level. In comparison, within the 0.2 million yuan price range, there is a limited supply of pure electric products featuring large space, family travel, and asia vets driving. The P7+ model has advantages and scalable potential in product development.

Risk

New car and autonomous driving demand are not as expected, and cooperation with Volkswagen is not as expected.