XPeng shares fell sharply on Tuesday after the Chinese electric-vehicle maker issued weaker-than-expected third-quarter guidance, raising fresh concerns about its ability to convert strong demand into deliveries.
The stock dropped 9.5% in Hong Kong trading, putting it on track for its biggest one-day decline since November last year.
Its US-listed shares had already fallen 9% on Monday.
XPeng has now lost more than 45% of its value in both Hong Kong and US trading this year, reflecting growing investor concerns about delivery momentum, profitability and the company’s ability to scale its latest models.
The immediate trigger was its third-quarter outlook.
XPeng expects revenue of RMB21.7 billion to RMB23.4 billion, well below the RMB26.69 billion FactSet consensus.
The company also expects to deliver between 115,000 and 121,000 vehicles during the quarter, implying a midpoint of roughly 118,000 units.
That forecast represents sequential growth, but would amount to only modest year-over-year growth at best.
Capacity constraints overshadow L03 demand
The weak guidance is particularly notable because XPeng has been counting on its new mass-market L03 model to accelerate volumes during the second half of the year.
The model has attracted strong orders since its July launch, but production is still ramping up.
Citi analysts said the delivery outlook was likely affected primarily by disruptions to the L03 ramp-up caused by supply-chain constraints.
The issue therefore appears to be less about a lack of consumer interest and more about XPeng’s ability to manufacture enough vehicles to meet that demand.
Nomura analysts said the revenue guidance implies a relatively stable average selling price of around RMB165,000 per vehicle.
They expect a more meaningful recovery in the fourth quarter if XPeng can resolve its capacity bottlenecks.
That makes the next few months particularly important for investors.
A successful production ramp could allow the company to capitalize on demand for the L03, while continued constraints could push the recovery further into the future.
Earnings add to investor concerns
XPeng’s second-quarter results provided little relief.
The company delivered 103,295 vehicles during the quarter, an increase of 64.8% from the previous quarter but only 0.1% higher than a year earlier.
Vehicle-sales revenue rose just 1% year over year to RMB17.05 billion.
More concerning was the deterioration in vehicle profitability.
Vehicle margin fell to 12.1% from 14.3% a year earlier, although overall gross margin improved.
Management attributed the margin pressure partly to a transition between product generations.
XPeng’s net loss widened to RMB1.34 billion from RMB480 million a year earlier.
Adjusted loss per American depositary share came in at RMB1.29, compared with the RMB0.91 FactSet consensus.
The company’s first-half delivery performance also puts pressure on its full-year ambitions.
Deliveries totaled about 166,000 vehicles in the first six months, down 15.8% from a year earlier, meaning XPeng will need a significant acceleration in the second half to meet its annual target.
Analysts turn more cautious
The latest results have prompted some analysts to lower their expectations for the stock.
Tiger Securities cut its XPeng price target to $15 from $20 while retaining a Hold rating, citing mixed second-quarter results and the weaker near-term delivery outlook.
Macquarie, meanwhile, maintained an Outperform rating but lowered its price target to $18, citing lower valuations among peers.
Xpang currently trades at $11.15 in the US.
The firm reduced its Hong Kong-listed target by 4% and its US ADR target by 5%.
Macquarie said volume momentum is rebuilding, suggesting that the longer-term investment case has not been abandoned despite the near-term challenges.
Bernstein SocGen Group also cut its price target for XPeng to $18 from $20 while maintaining its Market Perform rating on the stock.
For XPeng, however, the immediate test is whether it can turn the strong reception for the L03 into actual deliveries.
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