China EV maker XPeng set to turn profitable, says CGSI, lifting target price for the stock
CGSI analysts on Thursday (May 22) raised the firm's target price to HK123.80 from HK121.40, and reiterated their 'add' call. XPeng shares last closed at HK81.30 on Thursday. Its shares are also traded in the US.
The analysts cited higher delivery forecasts, robust EV shipping growth and 'significantly improved' Q1 results, which beat consensus from CGSI and Bloomberg.
CGSI analysts Ray Kwok and Sera Chen, highlighting the firm's surpassing of estimates with its improved performance, said: 'We expect XPeng to become profitable in the fourth quarter of FY2025, thanks to ongoing production cost reductions and economies of scale from more EV deliveries,' they said.
Q1 results beat consensus
XPeng's narrower net loss was around 60 per cent better than CGSI analysts' estimates, they added.
'(It) reported significantly improved Q1 2025 results, with non-GAAP (Generally Accepted Accounting Principles) net loss narrowing to 426 million yuan – (compared to) net losses of 1.4 billion in Q1 2024 and 1.4 billion in Q4 2024 – beating our and Bloomberg consensus forecasts of 825 million yuan net loss,' they said.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
This was due to improved vehicle profit margin (VPM) and stable technological services income (TSI) from Volkswagen, for which XPeng provides technical research and development and electrical/ electronic architecture services.
Additionally, XPeng's Q1 vehicle sales rose 159 per cent year on year to 14.4 billion yuan, driven by record numbers of EV deliveries, which spiked 331 per cent year on year to 94,000 units.
Revenue from services rose to 1.4 billion yuan, 44 per cent higher on year, as gross profit margin climbed to 15.6 per cent, up 2.7 per cent year on year, thanks to robust TSI and better VPM, they said.
Forecasts raised, fresh launches in pipeline
XPeng expects to deliver between 102,000 and 108,000 EV units in Q2 FY2025, fuelled by five upgraded models and rising overseas sales, said Kwok and Chen.
The upgraded models include the X9 MPV, Mona M03 Max sedan and G7 SUV models, slated for April, May and June, respectively.
The group also plans to unveil two models in the second half of 2025. The next-generation P7, which features right-hand drive for international markets, will be released in Q3 of 2025; an extended-range electric vehicle model will debut in Q4 of 2025.
Kwok and Chen said that the launches aim to diversify XPeng's product portfolio to serve a broader customer base.
'We lift our forecasts on XPeng's EV delivery in FY2025/ FY2026/ FY2027 to 430,000/ 570,000/ 700,000, reflecting robust market response and higher overseas shipments.'
New models launches to spur China growth
Beyond higher overseas sales, Kwok and Chen think that XPeng could make greater inroads into China's EV market.
'We believe XPeng is the favoured EV manufacturer among middle-class Chinese consumers because of its advanced driver assistance system (Adas) software and in-car intelligent operating system capability,' they said.
They add that XPeng is currently a leader in the Chinese Adas market.
The company plans to release around 20 models between 2025 and 2026, ranging from low-end sedans to high-end MPVs, to target diverse price ranges and consumer niches, they said.
'We expect XPeng's new models for FY2025 and FY2026 to drive its longer-term market share gains in China's EV sector.'
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles

Straits Times
3 hours ago
- Straits Times
EU leaders brace for frosty China summit as trade frictions bite
Find out what's new on ST website and app. FILE PHOTO: EU and Chinese flags are seen in this illustration taken, March 20, 2025. REUTERS/Dado Ruvic/Illustration/File Photo BEIJING - Expectations are rock-bottom for an EU-China summit on Thursday that will test European resolve and unity as the bloc faces intense trade pressure from both Beijing and the United States, analysts say. European Commission President Ursula von der Leyen and European Council President Antonio Costa plan to press Chinese leaders on rare earths and the war in Ukraine, both areas of tension, during the summit in Beijing. There is little hope for headway, at a time both sides face major challenges sustaining economic growth and Europe struggles to shore up support for Ukraine. The summit was shortened from two days to one due to a "scheduling conflict" raised by Chinese officials, two sources familiar with the planning told Reuters. A business roundtable that was meant to happen on the second day in the city of Hefei will now take place in Beijing, one of the sources said. Both sides may reach a modest joint statement on climate, one of the sources said, but no other tangible achievements are expected. In multiple recent speeches, von der Leyen has revived hawkish China rhetoric, accusing China on July 8 of "enabling Russia's war economy" and flooding global markets with overcapacity. "We know that we don't see eye to eye with China on many issues, but we believe that it is essential to have this kind of very direct and open and constructive conversation," said one EU official. Top stories Swipe. Select. Stay informed. Singapore Two found dead after fire in Toa Payoh flat Singapore Singaporeans aged 21 to 59 can claim $600 SG60 vouchers from July 22 Singapore Singaporeans continue to hold world's most powerful passport in latest ranking Singapore Singapore, Vietnam agree to step up defence ties, dialogue between leaders Asia Malaysia govt's reform pledge tested as DAP chief bows over unresolved 2009 death of political aide Tech Singapore to increase pool of early adopters in AI to complement data scientists, engineers Singapore Prosecution says judge who acquitted duo of bribing ex-LTA official had copied defence arguments Singapore Ports and planes: The 2 Singapore firms helping to keep the world moving The official and the sources declined to be identified as they were not authorised to speak to media. A spokesperson for the European Commission referred to a statement announcing the summit, which said leaders would discuss ways of ensuring "a more balanced, reciprocal and mutually beneficial trade relationship". In response to Reuters' questions, the Chinese foreign ministry referred to a spokesperson's statement on Monday. "Some people in Europe continue to ... exaggerate specific economic and trade issues and make groundless accusations against China on the Ukraine issue, causing unnecessary interference to China-EU relations," its spokesperson said. RISING TENSIONS The 27-member European Union has also been negotiating hard with Washington after U.S. President Donald Trump threatened 30% tariffs on most EU exports from Aug. 1, with prospects for a broader trade deal fading. At the Beijing summit, China hopes to press the EU for a solution to its tariffs on China-built electric vehicles, for which Beijing claims price commitment negotiations are in the "final stages". But European officials say there has been little progress for months. Last week, China threatened to respond to EU sanctions on two Chinese banks and five firms over the Ukraine war. Its commerce ministry said on Monday the sanctions "seriously harmed trade, economic and financial ties". Other trade disputes are simmering in the background. China retaliated against EU restrictions on medical device procurement with its own curbs on July 6, and slapped duties on French cognac producers. China's exports to the EU grew in May while its U.S. exports plunged 34.5% in value terms the same month, sparking fears Chinese trade overcapacity is being diverted to the bloc due to U.S. tariffs on Chinese goods. There is also a growing sense that EU firms are collateral damage for China's rare earth export controls that primarily targeted Washington but have disrupted European defence and automotive supply chains. In return for concessions on rare earths, China's asks could include reviving a long-stalled investment agreement after Beijing lifted sanctions on European Parliament members in May, and pushing back on U.S. export curbs on Dutch firm ASML's chipmaking equipment. China has raised both in the weeks leading up to the summit, two sources familiar with the matter said. 'GLOVES OFF' "The mood is extremely pessimistic in Europe regarding the summit," said Mathieu Duchatel, a director at the Institut Montaigne think tank in Paris, adding that Washington rejected previous EU proposals for coordination on China policy. "There is a sense that the gloves are completely off on the Chinese side ... They sense the transatlantic relationship has weakened and are trying to seize the opportunity." Diplomats and analysts also say that China is growing increasingly frustrated behind closed doors with European officials' repeated insistence on the war in Ukraine, which Beijing views as an obstacle in the relationship. There is little space for constructive dialogue on this, another EU official admitted, with Chinese counterparts denying evidence of Chinese firms' involvement in supplying dual-use goods to Russia. Meanwhile, China believes Europe will cave in to U.S. tariff pressure, said a diplomat familiar with Chinese official thinking. Beijing succeeded in getting Trump to lower crushing 145% tariffs during talks in May and scored a further win when Washington agreed to resume Nvidia H20 AI chip exports, leaving it in a relatively strong position. "This will be the latest in a long list of EU-China summits that have delivered next to nothing," said Noah Barkin, senior advisor at Rhodium Group's China practice. "It is a sign that the economic and security problems in the relationship have become so deep-seated as to be irreconcilable." REUTERS

Straits Times
5 hours ago
- Straits Times
Trump's Nato envoy warns China over ‘subsidising' Russia's war
Find out what's new on ST website and app. Nato ambassador Matthew Whitaker said the secondary sanctions are going to be significant. WASHINGTON – The US ambassador to Nato said China needed to be 'called out for their subsidising' of Russia's war in Ukraine as the Trump administration ratchets up its threat to impose tariffs if Moscow does not agree to a peace deal. 'China thinks they're fighting a proxy war through Russia, and we're seeing in some statements by the Chinese government that they want to keep the United States and our allies occupied with this war, so that we can't focus on our other strategic challenges,' Nato ambassador Matthew Whitaker said on July 22 on Fox Business. 'China, I think, has miscalculated,' he added. 'I think they need to be called out for their subsidising this killing that is happening on the battlefields in Ukraine.' Mr Whitaker's comments come a week after US President Donald Trump threatened to impose tough economic penalties on Russia if it does not end its war on Ukraine within 50 days. Mr Trump has said he would impose 100 per cent tariffs, which officials have cast as secondary levies that would fall on countries who buy Russian exports such as oil. China's imports of Russian oil have climbed since Russian President Vladimir Putin's invasion of Ukraine in 2022. Washington and other capitals allied with Kyiv view such oil purchases as a form of tacit support for Russia, helping to bolster its economy and undercut sanctions. Russia's crude exports hit a one-month high ahead of Mr Trump's tariff threat on buyers of Russian oil. 'The secondary sanctions are going to be significant. They're going to hit countries that are buying Russian oil, whether that's China, India or Brazil,' Mr Whitaker said. Mr Trump has raised the prospect of tightening economic pressure on Russia before without following through, and trade analysts have said secondary tariffs would be difficult to implement. The threat also comes at a crucial time in US-Chinese relations with a tentative trade truce between the world's two largest economies set to end in August. US Treasury Secretary Scott Bessent told Fox Business on July 22 that he would meet Chinese counterparts for talks next week in Stockholm. BLOOMBERG

Straits Times
6 hours ago
- Straits Times
Bessent says he will meet Chinese officials, discuss tariff deadline extension
US Treasury Secretary Scott Bessent said trade with China was in a very good place and meetings will take place on July 28 and 29. WASHINGTON - US Treasury Secretary Scott Bessent said on Ju ly 22 that he will meet his Chinese counterpart next week and discuss what is likely to be an extension of an Aug 12 deadline for higher tariffs. Mr Bessent told Fox Business Network's Mornings With Maria programme that trade with China was in 'a very good place' and the meetings in Stockholm would take place on July 28 and 29. 'I think we've actually moved to a new level with China, where it's very constructive and... we're going to be able to get a lot of things done now that trade has kind of settled in at a good level,' Mr Bessent said. While a previous tariff truce was focused on restarting the flow of Chinese rare earth metals and US semiconductor software and materials, Mr Bessent said that in Stockholm, Mr Trump administration officials would discuss other issues, including reducing China's over-reliance on manufacturing and exports. "Hopefully we can see the Chinese pull back on some of this glut of manufacturing that they're doing and concentrate on building a consumer economy," Mr Bessent said. He said he also wants to issue warnings to China about continuing to buy sanctioned Russian and Iranian oil and China's efforts to aid Russia's war against Ukraine. Mr Bessent said that there was bipartisan support in the US Senate for legislation aimed at imposing tariffs of 100 per cent on goods from countries that continue to buy Russian oil, namely China and India. Top stories Swipe. Select. Stay informed. Singapore Two found dead after fire in Toa Payoh flat Singapore Singaporeans aged 21 to 59 can claim $600 SG60 vouchers from July 22 Singapore Singaporeans continue to hold world's most powerful passport in latest ranking Singapore Singapore, Vietnam agree to step up defence ties, dialogue among leaders Asia Malaysia govt's reform pledge tested as DAP chief bows over unresolved 2009 death of political aide Singapore Woman evacuated from lift in Supreme Court building after falling glass triggers emergency halt Singapore Prosecution says judge who acquitted duo of bribing ex-LTA official had copied defence arguments Singapore Ports and planes: The 2 Singapore firms helping to keep the world moving 'I'm going to be in touch with my European counterparts. The Europeans that have talked a big game about sanctioning Russia, and it'll be very important for the Europeans to also be willing to put on these high level of secondary tariffs for sanctioned Russian oil.' He said that the US was poised to announce 'a rash of trade deals' with other countries, and Japan could be among these despite an election setback for Japan's ruling party and difficult negotiations. 'I wouldn't be surprised if we aren't able to iron out something with Japan pretty quickly,' Mr Bessent said. Nonetheless, he said that for most countries, tariffs would 'boomerang' back towards April 2 levels from the current 10 per cent, but negotiations on trade deals could continue. REUTERS