By Michael Elkins
A Macquarie Research analyst downgraded the US and Chinese shares of Xpeng (NYSE:XPEV) to Neutral after the company’s core high-tier midsize NEV market posted the lowest growth rate due to an already high 32% penetration rate. Macquarie also cut target prices 35% each to HK$98.00/US$25.00.
For 1H22, XPeng had 94% sales volume exposure to the midsize high-tier NEV market and 100% exposure to the midsize BEV market. The analyst expects a slowdown in these markets and cut Macquarie’s XPeng 2H22 sales volume estimate by 18% to 93k units, which is equivalent to an 11% volume decrease for FY22E.
Going into 2H22, The analyst expects XPeng’s volume to grow at 35% HoH, with the overall NEV market growing 22% HoH; thus, Macquarie is expecting XPeng to increase its 2H22 share of the overall NEV market to 3.1%.
The analyst wrote in the note, “We believe the main growth driver will be sales of the P5 and P7 models after component shortages are alleviated. The company also expects its new flagship model, G9, to be delivered in 4Q, and we believe that if the G9 can be competitively priced it will help XPeng expand quickly into the affordable luxury market.”
XPEV is currently down 7.6% in mid-day trading.