Welcome to the WeChat subscription number of “Sina Technology”: techsina
Text / Li Zheng
Source/city boundary (ID:ishijie2018)
On August 24, Xiaopeng Motors ushered in a record low share price. The trigger was the release of the 2022 semi-annual report. It continued to lose money without incident, and the magnitude of the loss was still surprising.
In the first half of 2022, the net loss of Xiaopeng Motors was 4.402 billion yuan, down 122.28% year-on-year; in the second quarter, the net loss reached 2.701 billion yuan, down 126% year-on-year, compared with 1.195 billion yuan in the same period last year, and the loss continued to expand.
In addition, at the press conference of the second quarterly report, He Xiaopeng, chairman of Xiaopeng Motors, a “madman” who is confident enough to use his own name as a brand, gave a conservative expectation for the sales volume in the third quarter.
He Xiaopeng said that Xiaopeng Motors expects to deliver between 29,000 and 31,000 vehicles. Considering that Xpeng Motors sold 11,500 vehicles in July, it means that the average monthly delivery in August and September was less than 10,000 vehicles.
Investors’ disappointment and worries about the future were immediately reflected in the stock price. On August 24, when the Hong Kong stock market opened, Xiaopeng Motors opened sharply lower, falling to HK$71.25 during the session, a decrease of 14.1%. This has already set an all-time low for Xpeng Motors shares, falling below the record set on March 15. As of the close, the share price of Xiaopeng Motors was HK$72.85, down 12.18%.
Facing the “cold” future, what other cards can Xpeng Motors play?
The more you sell, the more you lose
In the second half of 2021, He Xiaopeng compared the auto market to the spring and autumn, and three or five years later to the warring states. “If in three or five years from the Spring and Autumn period to the Warring States period, you can’t achieve the top three and top five in the Warring States period, you will be very challenged. I think our gross profit should be high at that time, and our scale should be larger at that time. It is more important today to solve the problem of not only living, but living stronger at that time.”
In He Xiaopeng’s view, gross profit margin will not be the focus of Xiaopeng Motors at this stage, and sales are more important.
The semi-annual report of Xiaopeng Motors in 2022 is a concrete manifestation of the above remarks. In the first half of 2022, Xiaopeng Motors’ total revenue was 14.891 billion yuan, a year-on-year increase of 121.9%; of which, auto sales revenue was 13.937 billion yuan, a year-on-year increase of 118%.
The bright spot comes from sales.
As the new sales leader in “Wei Xiaoli”, Xiaopeng Motors will maintain its sales lead in 2022. In the first half of the year, Xpeng Motors delivered a total of 69,000 vehicles, a year-on-year increase of 124%; the total delivery volume in the second quarter was 34,400 vehicles, a year-on-year increase of 98%.
Delivered 35,400 units of the P7 smart sports sedan, a year-on-year increase of 82%; delivered 23,300 units of the P5, a smart family sedan. Among them, the delivery volume of P7 in the second quarter was 16,000, an increase of 39% compared with the same period in 2021; the delivery of P5 was 12,800.
The delivery of nearly 70,000 vehicles has brought Xiaopeng 14 billion yuan in revenue, but it cannot change the fate of low gross profit margins.
At present, Xiaopeng Motors’ revenue mainly comes from automobile sales and services and other income. The gross profit margin in the first half of the year was 11.6%, which was the same as the same period last year. However, the gross profit margin of automobile sales, which occupies an absolute leading position, declined. It was 9.7% in the first half of the year, a year-on-year increase down 0.9 percentage points. Looking at the second quarter alone, it was only 9.1%, down 1.9 percentage points and 1.3 percentage points year-on-year and month-on-month respectively.
This is already the result of Xiaopeng Motors’ price increase. On May 6, Xiaopeng Motors announced that it will add a number of new models including the Xpeng P5/7, adjust the configuration and price of some models on sale, and cancel some user rights. But higher battery costs were partially offset by higher revenue from selling price adjustments.
Xiaopeng Motors, which is not as profitable as other car companies, has to accept the arrangement of fate.
It is worth mentioning that, in He Xiaopeng’s view, low gross profit, which is not a key point, will still cause certain problems to the operation. Huge sales expenses and R&D expenses are like a “big mouth”, which not only eats up the few gross profits of Xiaopeng Motors, but also consumes more cash, and these expenses cannot be reduced at present.
In the first half of the year, Xiaopeng Motors’ total expenses were 5.792 billion yuan, accounting for 38.9% of its total revenue, of which R&D expenses were 2.486 billion yuan, accounting for 16.7%, and sales expenses were 3.307 billion yuan, accounting for 22.2%.
R&D expenses are the top priority of innovative companies, but low gross profit limits Xpeng Motors’ continued investment. Since the last quarter, Xiaopeng Motors’ R&D expenses have been surpassed by Li Auto, and it currently ranks at the bottom of “Wei Xiaoli”.
Although the proportion of sales expenses to revenue has been decreasing year by year, the price range of Xpeng Motors’ main models is fiercely competitive and requires a lot of marketing expenses, stores and sales staff to support.
These expenses eventually led to Xiaopeng Motors losing money. In the first half of the year, Xiaopeng Motors’ net loss was 4.402 billion yuan, down 122.28% year-on-year; in the second quarter, the net loss was 2.701 billion yuan, down 126% year-on-year, compared with 1.195 billion yuan in the same period last year, and the loss continued to expand.
Sales have become the biggest highlight of Xpeng Motors’ semi-annual report, but “the more you sell, the worse the loss” is the status quo that it has to face.
‘Surprisingly’ low expectations
In the second-quarter conference call of Xiaopeng Motors, in addition to the performance, the outlook for the future also attracted much attention.
He Xiaopeng said that Xiaopeng Motors expects to deliver between 29,000 and 31,000 vehicles. “The delivery guidance data for the third quarter has taken into account factors such as price adjustments and promotions. In general, the promotion efforts are less than the increase in price increases. It is expected that the gross profit margin in the third quarter will return to the level of the first quarter.”
In the face of Xiaopeng’s mid-year report, Morgan Stanley issued a report saying that the company expects vehicle deliveries to fall by 10% to 16% quarter-on-quarter in the third quarter, which is surprising. The agency believes that considering that Xiaopeng Motors sold 11,500 vehicles in July, which means that the average monthly delivery in August and September is less than 10,000 vehicles, the relevant guidelines are conservative.
Hedging against the impact of conservative expectations in the third quarter, Xiaopeng Motors also revealed news about new cars.
On the earnings conference call, Xiaopeng Motors said that the B-segment car will be launched in the first half of next year to compete with the Model Y. Launched in the second half of next year, the C-segment is positioned as a high-end car, which is a new market segment that Xpeng has not been involved in before.
Judging from the current layout, coupled with the Xpeng G9 that will be launched in September this year, the number of Xpeng models on sale next year will reach six, covering more market segments. It can be said that the sales of the G9 are the focus. As the highest-positioned SUV model under Xpeng Motors, and a model with the highest possible price, the G9 will be the key to improving the gross profit margin of Xpeng Motors.
Compared with Xiaopeng P7, G9 faces a more “involutionary” market. Weilai ES6, Wenjie M7 and Avita, which has just been launched, will all be competitive opponents.
However, the market has already given Xpeng Motors a negative response.
After the results were released, the Hong Kong stock market opened on August 24, and Xiaopeng Motors opened sharply lower, falling to HK$71.25 during the session, a decrease of 14.1%. This has already set an all-time low for Xpeng Motors shares, falling below the record set on March 15.
At present, the total market value of Xiaopeng Motors is 125.4 billion Hong Kong dollars. In 2022, the company’s Hong Kong stock price will be the highest at HK$199.5, with a market value of 343.539 billion. The current market value has dropped by HK$218.139 billion from the highest in the year. Among the three “Weixiaoli” companies, as of August 24, the market value of Weilai was HK$238.6 billion, and the market value of Ideal Auto was HK$236.2 billion.
Xiaopeng Motors has been left behind by other new car-making forces on the same starting line.
This article is reproduced from: http://finance.sina.com.cn/tech/csj/2022-08-24/doc-imizirav9539019.shtml
This site is for inclusion only, and the copyright belongs to the original author.