Its G9 SUV taps into the premium segment
- XPeng yesterday officially launched its first premium electric SUV, the G9.
- The G9 adopts the most advanced autonomous driving system and fastcharging system among domestic automakers.
- With its competitive price-performance quotient, the G9 set to become XPeng’s key EV shipment driver in FY23F, in our view.
- Retain Add. Our DCF-based TP drops to HK$148.4 to reflect a cut in our EV shipment forecasts and a slower mid-term growth rate.
Flagship G9 adopts ultra-fast charging and city NGP
On 21 Sep, XPeng officially launched its flagship SUV, the G9, available in six variants ranging from Rmb310k (US$44k) to Rmb450K (US$64k) and three battery pack options: 570km, 650km and 720km. Delivery is set to begin at late Oct. The G9 is the first model to adopt XPeng’s proprietary 800V ultra-fast charging platform, with charging power peaking at 400kW for the most expensive variant; users can achieve a range of 200km with 5 minutes of charging, and charge from 10% to 80% in only 15 minutes (the cheaper variants take a little longer, but still at a fast 20 minutes), XPeng said. The G9 can also use thirdparty charging piles and still enjoy a much faster charging time vs. the models of other brands based on 400V platforms, it said. In addition, the G9 will be equipped with XPeng’s second-generation autonomous driving system called City NGP (City Navigation Guided Pilot) in 2023, upon completion of the system’s pilot programme in Guangzhou city. The City NGP can perform the full range of driving tasks e.g. change lanes, speed up or slow down, overtake cars and automatically detect and react to traffic lights.
The G9 to become XPeng’s key EV shipment driver in FY23F
The G9 will directly compete with Tesla’s Model Y, currently the best-selling premium electric SUV model in China. Given the G9’s competitive price-performance quotient, especially with its fast charging technology and autonomous driving system, we believe G9 shipment can exceed 10k units per month in FY23F and become XPeng’s best-selling model. Besides, XPeng is also scheduled to roll out two new models in FY23F – B-class SUV 5G in 2Q23F and large-size C-class sedan P9 in 2H23F. Nevertheless, we cut our electric vehicle (EV) shipment forecasts for 4Q22F and FY23-24F as we expect lower sales for the older models (G3i, P7 and P5) in view of keen competition in the high-end segment. We now estimate Xpeng to deliver 145k/223k/329k EVs in FY22F/23F/24F (previous forecasts: 160k/240k/370k).
Retain Add with lower TP of HK$148.40
We keep our Add call on XPeng as we expect its portfolio upgrades to aid in further market share expansion and better vehicle margins. Our DCF-based TP drops to HK$148.4 (WACC: 12.1%, terminal growth rate 5%, COE: 12.5%, RFR: 3.5%) as we apply a lower 15% mid-term growth rate (from 17%). Our TP is equivalent to 153x P/E and 65x EV/EBITDA in CY24F. Potential share price catalysts include strong G9 shipment, notable vehicle margin improvement, and narrowing losses. Downside risks: keener competition in China’s EV market.