Finance
Shares of Chinese EV company Xpeng are rising after forecasting delivery growth
The Xpeng X9 electric MPV on display at the Beijing Auto Show on April 25, 2024.
CNBC | Evelyn Cheng
BEIJING – Chinese electric car company Xpeng saw its shares rise after reporting an improvement in profit margin and a positive outlook for second-quarter deliveries.
The companies Shares listed in Hong Kong rose more than 13% in morning trading on Wednesday. U.S.-listed stocks were up nearly 6% in U.S. trading on Tuesday following the release of first-quarter results.
Xpeng reported that vehicle margin increased 5.5% in the first three months of the year, compared to negative 2.5% in the previous quarter. Vehicle margin is a measure of profitability: the higher the margin, the greater the profit the company makes on car sales.
The company expects deliveries of 29,000 to 32,000 vehicles in the second quarter, a year-over-year increase of at least 25%.
Xpeng delivered 21,821 cars in the first quarter of the year and 9,393 cars in April.
Following the earnings release, Nomura analysts said in a note on Wednesday that they were revising their estimates for Xpeng.
“Overall, we see XPENG making progress on its business plans, and we believe some development is ahead,” the report said.
“In the meantime, given the increasing competition in the overall market, which makes smaller players more vulnerable, we remain somewhat cautious and advise investors to keep a close eye on the new model launching next month under the MONA brand,” the company said. analysts from Nomura.
Like other companies looking to stay competitive in China’s electric car market, Xpeng is expanding its product range with a cheaper car brand called Mona.
The first Mona car – an electric sedan priced at less than 200,000 yuan ($27,890) – will go on sale in June and will begin mass deliveries in the third quarter, according to the company.
Xpeng attributed several hundred million yuan in service revenue to its partnership with German automaker Volkswagen. The services segment rose a total of 93.1% year-on-year to 1 billion yuan in the first quarter.
The Chinese company said it will enter into partnerships with car dealer groups in Western Europe, Southeast Asia, the Middle East and Australia to open new stores in the first half of this year. In total, Xpeng said it plans to expand its sales network to more than 20 countries. This is evident from a transcript of first-quarter earnings from FactSet.
