XPeng Inc. (XPEV: NYE) recently experienced a notable 14% decline in its stock value, sparking speculation and concern among investors. However, renowned analyst Tim Hsiao from Morgan Stanley offers a different perspective, highlighting a potential rebound and underlying strength in XPeng’s market position.
Analyst Tim Hsiao Offers a Different Perspective on XPeng:
Tim Hsiao explains that the recent dip in XPeng’s stock can be primarily attributed to the unwinding positions of onshore investors. These investors had aggressively purchased XPeng stocks in the second half of 2023, driven by the company’s remarkable advancements in autonomous driving technology. Additionally, concerns regarding the delayed turnaround in XPeng’s gross profit margin (GpM) contributed to the market’s nervousness.
Post-Chinese New Year Data Critical for Confirming XPeng’s Potential:
Hsiao’s recent checks reveal an interesting trend in December. While there was a slight month-over-month decrease in store traffic at XPeng’s flagship stores in key cities, the absolute foot traffic levels remained healthy, comparable to those observed in late October. The rollout of XNGP, XPeng’s full self-driving (FSD)-like feature, is believed to have stimulated demand for test drives, maintaining consumer interest.
Despite the temporary setback, Hsiao views the current sell-off as a potentially advantageous moment for investors to either build or strengthen their positions in XPeng. However, he advises caution, suggesting that investors wait for more concrete data post-Chinese New Year.
Investor Focus Shifts to Short-Term Sales:
Tim Hsiao anticipates that investor focus will shift to short-term sales and order trends following the X9 launch. This transition will also involve closely monitoring the performance of other XPeng models like the G6, G9, and P7i, particularly given the company’s expanding distribution channels. It is worth noting that challenges, such as increased competition from tech giants and potential price adjustments from competitors like Tesla in China, should also be taken into account.
Conclusion:
XPeng Inc. (XPEV: NYE) experienced a significant decline in its stock value, analyst Tim Hsiao from Morgan Stanley offers a different perspective. He believes that the dip in stock can be attributed to unwinding positions of onshore investors and concerns about the company’s gross profit margin.
