[Zhenzhuo Institutional View] XPeng (09868.HK): First-quarter outlook falls short of expectations

Daily Focus

$XPENG-W(09868.HK) reported total revenue of RMB 222.5 billion in the fourth quarter of 2025, representing a year-on-year increase of 38.2%, surpassing market expectations of RMB 216.35 billion. Vehicle deliveries during the period reached 116,249 units, up 27.0% year-on-year. The company achieved its first quarterly profit, with net profit recorded at RMB 3.8 billion; non-GAAP net profit reached RMB 5.1 billion, far exceeding the expected loss of RMB 70.22 million, demonstrating impressive performance.

The gross margin during the period climbed to 21.3%, up 6.9 percentage points from the same period in 2024, better than the market expectation of 20.2%. Benefiting from continuous cost reduction and product mix improvement, the automotive gross margin rose to 13.0%. Additionally, technology R&D services drove the service and other profit margin to as high as 70.8%. Despite R&D expenses surging 43.2% year-on-year to RMB 28.7 billion, the overall financial condition successfully turned from loss to profit.

However, the outlook for the first quarter of 2026 is exceptionally weak. The company expects first-quarter deliveries to be only 61,000 to 66,000 vehicles, a sharp year-on-year decline of 29.79% to 35.11%; total revenue is projected to be between RMB 122.0 billion and RMB 132.8 billion, a year-on-year decrease of 16.01% to 22.84%, significantly below the market consensus expectation of RMB 157.2 billion. In summary, although the fourth quarter achieved an important profitability milestone, the sharp drop in first-quarter guidance reflects that the company's short-term sales momentum is facing severe pressure.

Data source: KGI Securities