CICC: Lowered XPeng's target price to HKD 46, lowered sales volume forecast for this year and next year

BOCI Research report stated that XPeng's revenue in the second quarter increased by 23.9% quarter-on-quarter, slightly higher than expected, mainly due to a quarterly increase of approximately 200 million in revenue from value-added services. Although the downward shift in product structure led to a significant quarterly decline in average selling price per vehicle, the second-quarter gross profit margin of the whole vehicle was better than the bank's expectations, and the comprehensive gross profit margin also returned to a historical high of 14%. However, on the other hand, the cash flow performance was lower than expected, resulting in a decrease of approximately 4 billion yuan in net cash for the quarter. The report indicates that XPeng's third-quarter revenue guidance implies a quarter-on-quarter decrease of up to 50,000 yuan in average selling price per vehicle, lower than expected, mainly due to the increased proportion of sales of the economic model MONA and the transformation of overseas channels from a distribution model to a direct sales model. However, it is expected that with the increase in the proportion of overseas sales, further enhancement of economies of scale, the realization of cost reduction targets for the P7+, and the gradual elimination of costs related to the cessation of production of the P5, there is still room for improvement in the gross profit margin of the whole vehicle in the second half of the year. BOCI Research has lowered its sales volume forecast for XPeng for this year and next year to 170,000 and 300,000 units, respectively. The adjusted net loss forecast for this year has been slightly revised to 4.8 billion yuan, while the net loss forecast for next year remains at 3.3 billion yuan. The bank has reduced its target price to HKD 46, maintained a "buy" rating, and believes that investor confidence may need certainty in new car orders and the recovery momentum of sales