Xpeng Inc.
Xpeng Inc (NYSE: XPEV) is a China-based company engaged in design, development, production, and sales of smart electric vehicles (Smart EV). The Company's primary products are environmentally friendly vehicles, namely an SUV (the G3) and a four-door sports sedan (the P7).
Recent Financial and Business Updates:
- Financial Highlights: As of June 30, 2023, XPeng had cash and cash equivalents, restricted cash, short-term investments, and time deposits totaling RMB33.74 billion (approximately USD4.65 billion). For the second quarter of 2023, the company reported total revenues of RMB5.06 billion (USD0.70 billion), marking a 25.5% increase quarter-over-quarter.
- Gross Margin and Vehicle Sales: Despite the revenue increase, the company's gross margin for the quarter was negative 3.9%, a decrease of 5.6 percentage points compared to the previous quarter. Revenues from vehicle sales in the second quarter of 2023 were RMB4.42 billion (USD0.61 billion), reflecting a 25.9% increase from the first quarter of 2023, but a decline of 36.2% from the same period in 2022.
- Net Loss and Non-GAAP Metrics: XPeng reported a net loss of RMB2.80 billion (USD0.39 billion) for the second quarter of 2023, consistent with the same period in 2022 and an increase from the first quarter of 2023. Excluding share-based compensation expenses, the non-GAAP net loss for the second quarter of 2023 was RMB2.67 billion (USD0.37 billion). The net loss attributable to ordinary shareholders of XPeng in the same period was RMB2.80 billion (USD0.39 billion), and the non-GAAP net loss attributable to ordinary shareholders of XPeng was RMB2.67 billion (USD0.37 billion).
- Net Loss per Share and ADS: Basic and diluted net loss per American depositary share (ADS) were both RMB3.25 (USD0.45), with each ADS representing two Class A ordinary shares. Basic and diluted net loss per ordinary share was RMB1.63 (USD0.22). Non-GAAP basic and diluted net loss per ADS were both RMB3.10 (USD0.43), and non-GAAP basic and diluted net loss per ordinary share were both RMB1.55 (USD0.21) for the second quarter of 2023.
- Cash Position: XPeng's cash and cash equivalents, restricted cash, short-term investments, and time deposits as of June 30, 2023, amounted to RMB33.74 billion (USD4.65 billion), compared to RMB38.25 billion at the end of December 31, 2022.
- September 2023 Delivery Results and International Expansion: In September 2023, XPeng recorded monthly deliveries of 15,310 Smart EVs, marking a 12% increase over the previous month and an 81% increase year-over-year. XPeng G6 deliveries reached 8,132 units in September, bringing cumulative G6 deliveries to 19,381 units. Total Smart EV deliveries for the third quarter of 2023 reached 40,008 units, reflecting a quarter-over-quarter increase of 72%. XPeng has also initiated the delivery of XPENG G9 in four European countries, including Norway, Sweden, the Netherlands, and Denmark, as part of its international expansion efforts following its debut at the 2023 IAA Mobility event.
Technical Observation (on the daily chart)
The Relative Strength Index (RSI) observed over a 14-day period registers at 34.28, currently recovering from oversold conditions expectations of taking support from the current important levels of USD 12.50-USD13.50. Furthermore, the stock's current position is situated below both the 21-day Simple Moving Average (SMA) and the 50-day SMA, potentially acting as dynamic short-term resistance levels.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Speculative Buy’ rating has been given to Xpeng Inc (NYSE: XPEV) at the current market price of USD 13.88 as of October 23, 2023, at 07:45 am PDT.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
How to Read the Charts?
The yellow colour line reflects the 21-period simple moving average (SMA) while the blue line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.
The orange colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.
The red and green colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.
The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.
Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
The reference date for all price data, currency, technical indicators, support, and resistance levels is October 23, 2023. The reference data in this report has been partly sourced from REFINITIV.
Abbreviations
CMP: Current Market Price
SMA: Simple Moving Average
RSI: Relative Strength Index
USD: United States dollar
Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.
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