Citi lowers XPeng's target price to 107.8 yuan and also reduces earnings forecasts, incorporating valuation for the robotics business

AASTOCKS
2026.02.06 02:46

Citi published a research report indicating that XPeng-W (09868.HK) is expected to deliver approximately 1,000 humanoid robots in the fourth quarter of 2026. Referencing Tesla and industry peers' cost structures, the bank predicts an average selling price of RMB 1.23 million (same below) with a gross margin of 35%. After revising profit forecasts and changing the valuation method from pure price-to-sales ratio to sum-of-the-parts (SOTP) valuation to reflect the inclusion of robot business valuation, Citi lowered its target price for XPeng H shares from HKD 110.6 to HKD 107.8, and for XPeng (XPEV.US) U.S. shares from USD 28.4 to USD 27.6, maintaining a "Buy" rating.

The bank has reduced its revenue forecast for XPeng in 2025 by 5% and raised its net loss forecast by 12% to RMB 1.501 billion. It expects the gross margin for complete vehicles in the fourth quarter of 2025 to decline to 11.7%, but the quarter may still record a slight profit of approximately RMB 22 million. Considering the weak order growth in January 2026 and the downward adjustment of industry electric vehicle sales expectations, Citi has lowered its complete vehicle sales forecasts for 2026 and 2027 by 14% to 18%, to 500,000 units and 570,000 units, respectively, and has reduced the gross margins for complete vehicles in 2026 and 2027 by 0.1 percentage points to 14.9% and 16.1%, respectively.

At the same time, Citi has included the robot business in the revenue contributions for 2026 and 2027, expecting contributions of RMB 1.2 billion and RMB 3.6 billion, corresponding to sales of 1,000 units and 6,000 units, with gross margins of 35% and 33%, respectively. Therefore, assuming higher R&D expenses, Citi has lowered its total revenue forecasts for 2026 and 2027 by 8% to 15%, to RMB 91.7 billion and RMB 107.7 billion, respectively, while the net profit forecasts have been revised down from RMB 3.554 billion and RMB 5.964 billion to RMB 730 million and RMB 4.819 billion, respectively

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