China's top investment bank CICC has raised its price target on Xpeng Motors after the company released strong July delivery figures.
In a recently released research note, CICC's team said it raised the price target of Xpeng's US stock by 19.6 percent to $55, with a 36 percent upside, considering its sales continue to exceed expectations.
The team also raised its price target on Xpeng's Hong Kong shares by 19.4 percent to HK$215, with a 30 percent upside, after currency conversions.
CICC maintains Xpeng's Outperform rating.
Xpeng's current share price corresponds to 6.8x EV/Revenue in 2022, and the latest target price corresponds to its 9x EV/Revenue in 2022, the team said.
Xpeng delivered 8,040 units in July, up 219 percent year-over-year and up 22 percent from June, a new single-month delivery high.
The Xpeng G3 delivered 1,986 units in July, up 260 percent year-over-year and up 8 percent from June.
The Xpeng P7 delivered 6,054 units in July, up 251 percent year-over-year and 28 percent from June, and the cumulative delivery of P7 was 40,865 units.
Deliveries of Xpeng's newly refreshed Xpeng G3i are scheduled to begin in September, and Xpeng P5 was opened for pre-sale in July and is scheduled for delivery in the fourth quarter.
According to CICC, these two new models are highly competitive and along with the delivery of them, Xpeng is expected to further tap into the incremental smart car users and drive the delivery volume to a new high.
In addition, CICC is also bullish on Xpeng's layout on smart driving technology, saying that in-house developed technology is the key to win and Xpeng already has the core advantage.
"We believe that the multi-sensor + location fusion solution taken by Xpeng is superior to a single vision solution," the team said.
Xpeng's full-stack, in-house developed autonomous driving system will allow the company to continue to consolidate and expand its advantage, which is the foundation for a better intelligent experience, according to CICC.
With localized data and development, Xpeng is optimized for Chinese road conditions and driving habits, giving it a substantial lead over foreign companies in terms of intelligent driving experience, the team said.
Xpeng is expected to expand its advantage over traditional car companies with its full-stack in-house developed capability, which is rare in the industry, to achieve upward branding and premium pricing, according to CICC.
It is expected to achieve a sustained increase in sales and market share in the long-term popularity of new energy vehicles, the team wrote.
