【行业研究报告】小鹏汽车-4Q22E net loss to narrow; sales as key to FY23

WeprojectXpeng’s4Q22EnetlosstonarrowslightlyQoQtoRMB2.0bn,despite
lowerrevenueandgrossmarginQoQ.Althoughasimilarlevelofoperatingloss
couldoccurinFY23EversusFY22Eonourestimates,webelieveinvestorswould
focusmoreonXpeng’ssalesvolumegrowthinFY23E,whichiskeytoitslong-
termsurvival,asitsRMB35bnnetcashpositioncouldstillsupportXpengfor2-
3years.Itisstilldifficulttoquantifytheimprovementaftertheorganizational
structureandpersonnelchanges,butthehardlessonlearntcouldmake
managementmorefocusedandcostcautious.
4Q22Eearningspreview.Xpeng’s4Q22salesvolumeslightlybeatitsprior
guidancewiththeG9accountingfor28%.Thatcouldpartiallyoffsetthe
guidancewiththeG9accountingfor28%.Thatcouldpartiallyoffsetthe
margindentfromsalesvolumeQoQdeclineandhigherincentivecosts.We
projectXpeng’s4Q22Egrossmargintobe11.2%,2.3pptslowerthan3Q22.
Accordingly,weexpectXpeng’soperatinglosstowidenQoQin4Q22E.Net
losscouldnarrowslightlyQoQtoRMB2.0bnassumingforexgainamidRMB
appreciationagainstUSDin4Q22.
SalesvolumegrowthtobefocalpointinFY23E.WeprojectXpeng’s
FY23Esalesvolumetorise28%YoYto155,000units,aidedbytwonew
modelsandthreefaceliftedversionsofexistingmodels.Weexpectnew
platformsandbetterproductmixtopartiallyoffsetXpeng’smarginpressure
fromstiffercompetition,andtherefore,project13%grossmargininFY23E.
WeforecastXpeng’snetlosstonarrowslightlyinFY23EversusFY22E,
assumingnosignificantforexloss.Ontheotherhand,webelieveinvestors
wouldlikelyfocusonXpeng’ssalesvolumegrowthinFY23E,especiallyon
newmodels.
Stillhaschancetoturnaround.Itisstilltooearlytodrawtheconclusion
whetherXpengcouldsurvivethroughouttheheightenedNEVcompetition,
givenitsRMB35bnnetcashposition.However,webelieveLiAuto(LIUS,
BUY)andNIO(NIOUS,BUY)nowarebetterpositionedthanXpengtobea
long-termwinner.
Valuation/Keyrisks.WemaintainourBUYratingandcuttargetpriceslightly
fromUS$20.00toUS$18.00,stillbasedon2.5xofourrevisedFY23E
revenueestimates,alowertargetvaluationthanLiAuto(LIUS,BUY)and
NIO(NIOUS,BUY),givenitslowerprojectedsalesvolumegrowth.Keyrisks
toourratingandtargetpriceincludeslowerautonomousdrivingtechnology
advancementandafastercatchupfromotherautomakers,lowersales
volumeand/orgrossmarginthanweexpect,aswellasasectorde-rating.