December can at least come close to hitting the 15,000 target Xpeng management had previously laid out for peak 4Q monthly volume.
(Image credit: Xpeng)
Xpeng Motors today reported revenue of 5.72 billion yuan ($888 million) in the third quarter, beating Wall Street analysts' estimates of 5.21 billion yuan.
It reported a net loss of RMB 1.59 billion in the third quarter, above market expectations for a net loss of RMB 1.177 billion.
How should these results be interpreted? Deutsche Bank analyst Edison Yu's team provided their first look, and here is what they said:
Xpeng delivered solid 3Q results. Deliveries were already reported at 25,666 units, leading to revenue of 5.72bn RMB (both materially above initial guidance), essentially in line with our 5.63bn RMB forecast.
Overall, gross margin increased 250bps QoQ to 14.4%, above our 13.7% estimate (consensus 13.4%), driven by upside in vehicle margin (13.6%; up 260bps QoQ vs. our 13.0%). Vehicle margin benefitted from better mix and manufacturing efficiency from higher volumes.
Opex of 2,803m RMB came in a bit higher than expected (DBe at 2,618m), driven by R&D (higher headcount and new vehicle developmental costs) while SG&A matched our model. All together, EPS of (1.77) came in slightly better than our (1.86) forecast.
Management provided what we believe is a conservative 4Q21 guidance, calling for 34,500-36,500 deliveries, below our 37,500 forecast. Since going public, we note Xpeng has beaten its delivery guidance every quarter by >2k units on average. This implies deliveries increasing MoM to average ~12,700 in Nov/Dec at the midpoint (Oct came in at 10,138 units).
We think this means December can at least come close to hitting the 15,000 target management had previously laid out for peak 4Q monthly volume. This is expected to translate into sales of 7.1-7.5bn RMB.
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