Exchange: NYSE | Sector: Consumer Cyclical | Industry: Auto Manufacturers
Q4 2023
Published: Dec 31, 2023
Earnings Highlights
Revenue of $13.05B up 223.6% year-over-year
EPS of $-3.02 decreased by 11% from previous year
Gross margin of 6.2%
Net income of -1.35B
"Our company achieved a positive free cash flow of more than RMB 6 billion for the second half of 2023 and achieved, for the first time, positive full-year operating cash flow." - He Xiaopeng, CEO
XPeng Inc. (XPEV) reported remarkable growth in Q4 2023, posting a revenue of RMB 13.05 billion, marking a 153.9% year-over-year (YoY) increase and a 53% sequential increase. This surge in sales was propelled by a robust delivery volume of over 60,000 units in Q4 alone, a tremendous 171% increase YoY, as the company launched new models such as the G6 and G9. Despite challenges in gross margin and operational losses, management expressed confidence in their strategic shifts, enhanced operational efficiencies, and an upcoming strong product pipeline for 2024, positioning XPeng to potentially navigate the intensifying competition in the EV space.
Profitability Metrics:
- Gross Profit: RMB 809.47 million, Gross Margin: 6.2%.
- Operating Income: -RMB 2.05 billion, signaling ongoing investment in R&D and market expansion.
- Net Loss: -RMB 1.35 billion versus -RMB 2.36 billion in Q4 2022.
Balance Sheet Health:
- Cash and equivalents: RMB 45.70 billion as of Dec 31, 2023, supporting a strong liquidity position.
- Total Liabilities: RMB 47.83 billion, with a Debt-to-Equity ratio of 0.424.
Cash Flow:
- Achieved positive full-year operating cash flow in 2023, with strong cash positions fundamental for ongoing operations and growth initiatives.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
13.05B
223.56%
53.00%
Gross Profit
809.47M
1 107.59%
455.10%
Operating Income
-2.05B
20.59%
35.05%
Net Income
-1.35B
42.36%
65.33%
EPS
-3.02
-11.03%
32.89%
Key Financial Ratios
currentRatio
1.51
grossProfitMargin
6.2%
operatingProfitMargin
-15.7%
netProfitMargin
-10.3%
returnOnAssets
-1.6%
returnOnEquity
-3.71%
debtEquityRatio
0.42
priceToBookRatio
2.55
priceEarningsRatio
-17.17
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Strategic Growth and Market Positioning:
- He Xiaopeng, CEO: 'XPeng experienced impressive growth in our delivery volume quarter-by-quarter in 2023, which exceeded 60,000 in Q4, up 171% year-over-year.' This highlights the effectiveness of their strategic changes and product launches.
- Positive Financial Outlook: 'We achieved a positive free cash flow of more than RMB 6 billion for the second half of 2023 and have over RMB 45 billion in cash, positioning us strongly in a competitive environment.'
Our company achieved a positive free cash flow of more than RMB 6 billion for the second half of 2023 and achieved, for the first time, positive full-year operating cash flow.
— He Xiaopeng, CEO
We expect our first quarter revenue to be between RMB 5.8 billion and RMB 6.2 billion, up 43.8% to 53.7% year-over-year.
— James Wu, VP of Finance
Forward Guidance
Management projects a continued growth trajectory into 2024, targeting to launch over 10 new vehicle models within three years and maintain delivery momentum despite current market pressures. XPeng expects Q1 2024 vehicle deliveries of 21,000 to 22,500 units, an increase of 15.2% to 23.4% YoY, with Q1 revenue expectations between RMB 5.8 billion and RMB 6.2 billion, suggesting positive revenue growth amid a competitive landscape.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
XPEV Focus
6.20%
-15.70%
-3.71%
-17.17%
TSLA
17.60%
8.20%
12.70%
24.92%
LI
23.50%
7.28%
9.41%
11.62%
RIVN
-46.10%
-1.20%
-16.60%
-3.71%
LCID
-1.61%
-4.69%
-13.50%
-3.69%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
With XPeng’s strong revenue performance and positive cash flow trends, along with management’s strategic focus on product innovation, the company is well-positioned for growth. However, investors should monitor market competition closely and assess the effectiveness of XPeng's strategic adjustments in response to industry dynamics. Given these factors, XPeng presents a compelling long-term investment opportunity in the EV sector, contingent upon sustaining improvements in profitability alongside continued revenue growth.
Key Investment Factors
Growth Potential
XPeng's focus on innovation and expanding product lines, particularly their new brand MONA targeted at young consumers, presents strong growth opportunities. Their successful $6 billion free cash flow generation and cash reserves for strategic investments bolster their potential.
Profitability Risk
Market competition intensifies, especially with aggressive pricing strategies from competitors. Sustaining delivery growth while maintaining quality and profitability also remains a challenge, especially with market volatility and evolving consumer preferences.
Financial Position
XPeng's cash position of RMB 45.70 billion provides a solid foundation for operational flexibility and future growth. Yet, the company remains in operational losses, indicating a need for sustainable profit even as revenues grow.
SWOT Analysis
Strengths
Strong delivery growth of 171% YoY in Q4 2023.
Successful new product launches, particularly the G6 and G9, enhancing market share.
Substantial cash reserves of RMB 45 billion enabling investments in technology and expansion.
Weaknesses
Continued operational losses despite increased revenue.
Gross margin contracted YoY, reflecting pressures from inventory and promotional costs.
Opportunities
Expansion into international markets increasing global sales potential.
Development of a new brand targeting the mid-priced EV segment, addressing untapped consumer demographics.
Threats
Intense competition from established players like Tesla, Li Auto, and NIO, which could pressure market share.
Economic fluctuations and manufacturing costs could impact profitability and pricing strategy.