Guosheng Securities: The first "buy" rating given to Xiaopeng Automobile-W (09868) has a target price of HK$259

Zhitong Finance APP learned that Guosheng Securities released a research report saying that it first gave Xiaopeng Automobile-W (09868) a "buy" rating with a target price of HK$259. The current valuation does not yet include potential monetization of smart cockpits, Robotaxi, robots, aircraft, etc. In the future, Xiaopeng's intelligent exploration is expected to bring more technology and commercial value to the company. The bank expects to sell about 19/29/39/550,000 units in 2022-25, and total revenue in 2021-25 will reach 211/399/641/935/121.8 billion yuan.

The main views of Guosheng Securities are as follows:

Xiaopeng Motors: An explorer of the future.

Xiaopeng Automobile positions itself as a "technology company focusing on future mobility". "Intelligent" is the company's differentiating label from other electric vehicles. The company's management team is mainly from Alibaba and GAC, with the dual genes of science and technology Internet and automobile manufacturing, at the beginning of its establishment, it established the vision of technology to change travel, and firmly invested in the direction of automatic driving and intelligent cockpit.

Xiaopeng Automobile is positioned in the largest price band of 150,000-400,000 yuan, with a compact layout + medium-sized cars and SUVs, and has formed a product matrix of "G3+P7+P5+G9" and continued to strengthen the brand image of "smart driving" through new products. In 2021, Xiaopeng ranked first in the list of new forces with 98,155 units delivered.

Electrification: The electric vehicle market is vast, and Xiaopeng's soft and hard strength is outstanding.

2022 is the year when the new forces meet in the tram price band and the intelligent driving system, taking Xiaopeng and Weilai as an example: 1) The whole vehicle: Xiaopeng is up, Weilai is down, and meets at a price of 300,000-400,000; 2) Intelligent driving: Xiaopeng XPILOT4.0 and NIO NAD face to face.

The bank expects that the penetration rate of electric vehicles in the country will reach 40% in 2025, and the delivery volume of electric vehicles is expected to reach 7.9 million units. In the vast track, Xiaopeng has both soft and hard, and the hardware side has the core components of the self-developed three electrics and the software side with smart driving XPILOT and smart cabin XmartOS, and its strength ranks first in the first echelon of the new car-making forces. The bank expects that in 2025, Xiaopeng Automobile sales are expected to grow to 550,000 units, and the market share of electric vehicles will reach 7%.

Smart Driving: From technology labels, to profit improvement engines.

Xiaopeng Automobile is the first car company in China to carry out self-research on automatic driving. At present, there are two generations of XPILOT3.0/3.5 system, VPA intelligent parking and NGP automatic navigation assistance. Among them, XPILOT3.5 is on the hardware side of 1), which is equipped with two lidars for the first time, and has more hardware redundancy than Tesla FSD; 2) Algorithmic side, more dependent on visual perception; 3) On the scene side, it is expected that the first OTA upgrade to urban NGP will be upgraded in 2022H1. As Xiaopeng Motors' mass production accelerates and its entry into robotaxi, the iteration of its intelligent driving technology will also accelerate.

The bank believes that intelligent driving is not only a technical advantage of Xiaopeng, but also an important revenue and profit improvement engine, and its growth driver mainly comes from two aspects: 1) the increase in software payment penetration; 2) Software charges increased.

The bank estimates that Xiaopeng Automobile software services are expected to bring 6.6 billion yuan in revenue in 2025. Due to the high gross profit margin of software, the proportion of software's gross profit contribution in 2025 is expected to increase from about 5% in 2021 to about 23% in 2025. At that time, Xiaopeng Automobile will be different from traditional automakers in terms of business model.