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Citigroup maintained its mid- to long-term optimistic view on electric vehicle maker XPeng Motors, keeping its Buy rating, but slashing its target price from HK$198.38 to HK$107.17. The bank maintain the rating of XPeng Inc’s ADR at Buy, but slashing its target price from $51.59 to $27.87.
Xpeng’s gross profit margin in the second quarter of the year was higher than market consensus, but its guidance for third-quarter vehicle delivery was very weak due to multiple uncertainties including the impact of the Covid outbreaks, consumption degrading and challenges to the supply chain.
The bank lowers the forecast of Xpeng’s car sales in 2022 – 2024 to 140,000 units, 250,000 units and 360,000 units, respectively, and expects its gross profit marget to be 11.5%, 17.1% and 21.6%.
Separately, Morgan Stanley said Xpeng Motors’ vehicle delivery guidance for the third quarter, falling by 10% – 16% quarter on quarter to 29,000 – 31,000 units, is surprising.
As Xpeng’s car sales reached 11,500 units in July, which means its average monthly car delivery in August and September will be lower than 10,000 units.
The bank maintains an Overweight rating for Xpeng, with target price for its ADR at $41.