XPeng: A Drive Into a Promising Future
31/8 01:48
Chinese stocks have taken a battering in 2021, as the Beijing authorities’ tightening of regulations has seen investors heading to the exit gates. Despite having overall government support, reflecting the tougher landscape EVs have had to navigate in 2021, Chinese EV stocks have not been spared either. Shares of XPeng (XPEV), for instance, sit 5% into the red this year.
However, following the company’s Q2 earnings, which Deutsche Bank's Edison Yu calls “mostly solid,” the analyst sees enough to be buoyed about XPeng’s prospects.
That is despite what Yu calls a “conservative” 3Q21 guidance. The company expects between 21,500 to 22,500 deliveries, below “investor expectations” in the 24,000-25,000 range.
Yu thinks the soft guidance is “almost entirely due to G3i changeover timing.” The model is getting a mid-phase makeover in China, with deliveries beginning in September, and the transition should result in “a few weeks of downtime.” Further down the line, however, in Q4, given “freshness of product and accelerating EV penetration,” the analyst anticipates all 3 XPeng vehicles...