U.S.-listed Chinese EV makers XPeng Inc - ADR XPEV and Nio Inc - ADR NIO reported strong September deliveries.
The Nio, XPeng Analyst: BofA Securities analyst Ming Hsun Lee reiterated a Buy on XPeng shares and raised the price target from $61 to $63.
The analyst also reiterated a Buy rating and $62 price target on Nio shares.
The Nio, XPeng Theses:
XPeng Impresses With Strong Deliveries Momentum, Superior Execution: XPeng's September deliveries of 10,400 units represented 199% year-over-year and 44% month-over-month, Hsun Lee noted. The quarterly number of 25,666 units, the analyst said, was also 199% higher than a year ago.
Citing the strong third-quarter delivery number, XPeng's superior execution even amid chips shortage and power rationing, and robust demand for P7 and the P5, the analyst raised his volume sales estimates for 2021, 2022 and 2023 by 6%, 9% and 10%, respectively, to 92,400, 156,000 and 217,000.
XPeng's recently launched P5 sedan delivery is likely to be the next catalyst to boost monthly sales, the analyst said. The retail price of the company's third model is 158,000 yuan to 224,000 yuan ($24,500-$34,750), he noted.
XPeng is likely to aggressively expand its point of sales and charging infrastructure and initiate more marketing campaigns to strengthen brand equity, BofA said.
Related Link: XPeng Launches P5 EV Sedan With Advanced Smart Capabilities, Sub-$25,000 Starting Price
Nio Prevails Despite Pushbacks: Nio's September deliveries were up 126% year-over-year and 81% month-over-month to 10,600 units, Hsun Lee said. Quarterly deliveries climbed 100% year-over-year and 12% quarter-over-quarter to 24,400 units, he added.
The company's August performance, the analyst said, was marred by supply chain constraints such as chip shortage and the resurgence of the pandemic in certain areas in China.
Notwithstanding the hiccups, Nio managed to report record numbers for September and the quarter, he added.
On Nio's Norwegian expansion, the analyst noted that the company has opened its first Nio House in Norway and completed the first batch of vehicle deliveries in the country.
Nio plans to build 20 Power Swap stations in Norway by the end of 2022, the analyst added.
The adoption of a hybrid battery pack will help Nio reduce cost per car by around 2%-3%, which should improve its gross profit margin or enable it to use more higher-end components to enhance performance, BofA said.
The firm attributed its bullish bias to solid volume sales/model pipeline, and the company's focus on autonomous driving, powertrain, and charging solutions to enhance user experience.
XPeng, Nio Price Action: XPeng shares were down 0.20% to $35.46 and Nio shares were slipping 0.73% to $35.38 at market close Friday.
Related Link: As Nio Takes First Steps Into Norway, The Chinese EV Startup Will Be Up Against These Formidable Rivals
Photo: Courtesy Nio/ Courtesy Xpeng
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