2024-04-19 16:00:00 ET
Summary
- We are reiterating our Buy rating despite XPEV's drastic decline by -54% over the past six months, well underperforming the wider market at +16%.
- Based on the strategic entry point to the 100K-150K Yuan mass-market EV segment and expansion to Asia, we believe that its reversal may be here as soon as H2'24.
- Combined with its low break-even price point and compelling XNGP ADAS platform, XPEV continues to offer a compelling investment thesis, especially given the double-digit growth through 2026.
- Based on the projected Free Cash Flow generation in FY2025, we expect the automaker to utilize much of the profitability on new growth opportunities as well.
- We maintain our belief that the risk-reward ratio appears to be attractive, with XPEV reporting a relatively stable book value per share, thanks to the growing balance sheet and tight share count.
We previously covered XPeng ( XPEV ) in October 2023, discussing the market's over-reaction to its deliveries to Israel as conflict broke out in the area, expanded production ramp up through September 2023, and mixed FQ2'23 financial results....
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For further details see:
XPeng's Reversal Is Almost Here - Pending Bullish Support