Guosen Securities has an HKD 206-223 price target on XPeng's shares traded in Hong Kong, implying upside of 17 percent to 26 percent.
China-based brokerage firm Guosen Securities initiated coverage on XPeng Motors with a Buy rating in a research report released today.
Guosen Securities analyst Tang Xuxia's team expects XPeng to post EPS of RMB -2.78, RMB -2.42, and RMB -1.99 for 2021-2023, respectively.
They give XPeng a price target of HKD 206-223 for the company's shares traded in Hong Kong based on a PS valuation of 8-9x in 2022.
XPeng closed up 2.98 percent to HK$176.4 in Hong Kong today, and the price target implies an upside of 17 percent to 26 percent.
The team said XPeng aims to brand itself as intelligent since its inception and has achieved full-stack in-house development of intelligent driving systems, and has become one of the strongest car companies in terms of intelligence strength.
The company's core management team consists of top talent from the Internet, automotive and finance industries, with a strong and balanced lineup, the team said, adding that XPeng CEO He Xiaopeng has a strong entrepreneurial spirit and sense of innovation.
Currently, electrification and the rise of local brands are the main lines of development in China's auto industry, with quality car companies, including XPeng, working on both software and hardware to take full advantage of a flexible and efficient organization, the team said.
XPeng's focus on the RMB 150,000-300,000 mid- to high-end car market is the No. 1 segment in the EV industry, the team said, adding that it is also a market that has received less attention from mainstream new car makers, and XPeng is positioned to compete at the best end of the spectrum.
The X-EEA 3.0 architecture launched by XPeng has enabled central supercomputer control as well as regional control, leading the pack among local brands and is gradually building a core barrier to brand differentiation, they said.
The company's three models currently on sale, the P7, P5 and G3i, have outstanding product competitiveness, distinctive intelligence features and continued climbing sales performance. The G9 received lively buzz after its debut at the Guangzhou Auto Show, the team said.
The penetration rate of NEVs in China has increased rapidly in recent years, and the market scale has expanded rapidly. The future development rate of the NEV market will directly affect the company's performance and pose a significant impact on the share price, the team said.