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An Xpeng P7 car will be unveiled at the Beijing Auto Show in Beijing on September 27, 2020.
WANG ZHAO / AFP via Getty Images
Chinese start-up of electric vehicles
XPeng
strong deliveries reported in the fourth quarter Sunday night.
The company delivered 5,700 vehicles in December 2020, compared to 4,224 in November and 326% higher than in December 2019. For the entire fourth quarter, XPeng (ticker: XPEV) delivered 12,964 vehicles.
Deliveries beat XPeng’s own initial projections. The XPeng management said during its revenue services in the third quarter that they would deliver approximately 10,000 vehicles in the fourth quarter.
All three U.S.-listed Chinese EV stocks had a busy weekend, each with a delivery number. The theme was the same for everyone – XPeng, along with
NIO
(NIO) en
Li Auto
(Li) exceeded the internal projections. NIO delivered more than 17,000 vehicles, about 1,000 more than management predicted. Li delivered more than 14,000 vehicles, about 3,000 more than management predicted.
EV leader
Tesla
(TSLA) also reported deliveries in the fourth quarter over the weekend. Elon Musk’s company delivered more than 180,000 vehicles in the fourth quarter, which was better than what the approximately 176,000 vehicle analysts had predicted.
Predicting investors’ reaction to the Chinese EV announcements is not easy. All three stocks fell after reporting strong deliveries in November. Although Li sold more stock to raise cash, the three delivery figures were released in November.
Falling on good news, however, is a common action in the market, and EV shares are definitely in a bull market. Tesla rose by about 740% in 2020 and is now the world’s most valuable car company with a wide margin. XPeng stock closed at $ 42.83 in 2020, significantly higher than the summer price of $ 15 per share.
The gains make XPeng, and the Chinese EV sector as a whole, expensive. For example, XPeng is trading around 2021 times in 2021 sales. Barron’s recently wrote that Chinese EV shares seem too expensive. The article appeared in mid-December and the Chinese EV shares are, on average, trading where they did then.
Wall Street mostly disagrees Barron’s. More than 60% of analysts rate the three Chinese EV shares – NIO, Li and XPeng – as Buy. The average buy rating ratio for shares in
Dow Jones Industrial Average
is about 57%.
For XPeng, 67% of the analysts covering the company review the Buy share. The average price target for analysts is around $ 49 per share.
Monday should be an interesting day. Investors also have to deal with the recent Model Y price in China. The Model Y crossover is under a NIO EC6. The XPeng crossover EV – the G3 model – is priced among the NIO and Tesla crossovers. However, investors’ concerns about price reductions could be offset by this weekend’s delivery numbers.
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