A Xpeng G3 car
Hector Retamal/AFP via Getty Images
Chinese electric-vehicle maker XPeng reported first-quarter numbers that were a little better than analysts expected. Shares, however, were weaker Monday. Gross profit margins and guidance might be concerning investors.
But investors looking at consensus numbers to determine what things looked like, and will look like, for XPeng should remember one thing: The numbers that make up U.S. consensus estimates don’t reflect the majority of analysts covering the stock.
XPeng (ticker: XPEV) reported a loss of 28 cents per American depositary receipt from $1.2 billion in sales. Analysts expected a loss of 30 cents on sales of $1.1 billion. In the fourth quarter, XPeng reported an adjusted loss of 11 cents from about sales $1.3 billion.
XPeng’s U.S.-listed stock was down about 3.7% in early trading Monday to about $22.41 a share. S&P 500 and Dow Jones Industrial Average futures both rose about 0.7%.
The company delivered 34,561 vehicles in the first quarter. XPeng delivered 41,751 vehicles in the fourth quarter of 2021. The Chinese Lunar New Year holiday in February is a seasonally weak period. First-quarter sales also were impacted by Covid’s reemergence in some areas.
First quarter gross profit margins came in at 12.2%. Analysts were projecting 12.7%. Gross profit margins were 12% in the fourth quarter.
Looking ahead, XPeng expects to deliver between 31,000 and 34,000 vehicles in the second quarter. That implies about 12,000 deliveries for May and June. XPeng delivered 9,002 vehicles in April. XPeng’s best month ever for vehicle deliveries was 16,000 back in December 2021.
Second-quarter sales are expected to be about $1.1 billion. Wall Street was projecting about $1.2 billion in sales for the current quarter. The number is a little light, but sometimes U.S.-listed companies are in a tough spot regarding analysts’ expectations. The estimates on FactSet , for instance, are comprised of only a few analysts and roughly one-third of the 18 or so that cover XPeng stock. Most of the analysts are located in Asia and their numbers aren’t always picked up by sites that aggregate numbers.
Management, for their part, sounds upbeat about EV trends in China. “Demand for our high-quality EV products was robust and our proprietary suite of technologies continue to lead the industry,” said CEO He Xiaopeng in the company’s news release. “Superior in-house technology development capability and proactive supply chain management enabled us to address supply chain challenges more efficiently. We remain confident in expanding our market share despite the impact of semi-conductor shortage and COVID-19.”
Results aren’t all that bad considering some of the headwinds such as Covid-19 and what’s happened to the stock. Coming into Monday trading, XPeng stock has declined about 54% this year, worse than the 18% and 14% respective losses for the S&P 500 and Dow.
Investors have sold high-growth stocks amid inflation and rising interest rates. Delisting fears have also contributed to 2022 losses. Shares of U.S.-listed foreign companies might be delisted if the foreign companies don’t meet U.S. auditing standards. Many firms in China don’t yet meet the requirements.
The Invesco Golden Dragon China ETF (PGJ) holds stock in U.S.-listed Chinese companies including XPeng. The ETF has dropped about 28% in 2022.
Options markets imply the stock will move 10% to 12%, up or down, following earnings. That would be more volatility than recent quarters. XPeng stock has moved about 3.5%, up or down, after the following four quarters. Shares have risen twice and fallen twice over the past four quarters.
The company hosts an earnings conference call at 8 a.m. Eastern time to discuss results. Analysts and investors will be interested to hear an update about demand, Covid and raw materials inflation.
Write to Al Root at [email protected]
