China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

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China/Asia TMT

Shawn Yang

Equity Bottom-Up

<ul>
<li>Xpeng reported soft 4Q22 results, with top line of RMB 5.14bn, missing our estimate/cons. by (5.6%)/(9.7%); GPM of 8.7%, missing our estimate/cons. by (1.6ppt)/(3.4ppt), primarily due to increased sales promotions. </li>
<li>We maintain SELL, because 1) price war and intensified competition in 2023 are still key challenges facing its existing and new models; </li>
<li>2) margin pressure ahead amid the price war, while its cost reduction initiatives starting from 2H23 take time to verify effect.</li>
</ul>


Xpeng reported soft 4Q22 results, with top line of RMB 5.14bn, missing our estimate/cons. by (5.6%)/(9.7%); GPM of 8.7%, missing our estimate/cons. by (1.6ppt)/(3.4ppt), primarily due to increased sales promotions. 
We maintain SELL, because 1) price war and intensified competition in 2023 are still key challenges facing its existing and new models; 
2) margin pressure ahead amid the price war, while its cost reduction initiatives starting from 2H23 take time to verify effect.


[XPeng (XPEV US) Earnings Review]: Facing Price War and Fiercer Competition in 2023