Article | Lever Game Zhang Yinyin

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Although the latest quarterly report of Xiaopeng Automobile in 2024 is still a loss, there are two highlights:

First, substantially reduce losses;

Second, the cooperation with Volkswagen has achieved initial results, and the business segment of "service and others" has achieved a revenue of 1 billion yuan.

Xiaopeng Auto is at a turning point?

Ok, no nonsense, let's go straight to the topic.

1. First quarter report of substantial loss reduction

According to the financial report, in the first quarter of 2024, Xiaopeng Auto's total revenue was 6.55 billion yuan ($910 million), up 62.3% from 4.03 billion yuan in the same period of 2023, and of course, down 49.8% from 13.05 billion yuan in the fourth quarter of 2023.

Objectively speaking, the gap between this income and the ideal car is still large, but for Xiaopeng Auto, the growth rate is still good.

Among them, auto sales revenue was 5.54 billion yuan (770 million dollars), up 57.8% from 3.51 billion yuan in the same period of 2023, and down 54.7% from 12.23 billion yuan in the fourth quarter of 2023.

The year-on-year growth is mainly due to the increase in deliveries in the first quarter of 2024 (especially X9 models). The quarterly decrease is mainly due to the decrease of G6 and 2024 G9 delivery in the current period, which is partially offset by the delivery of X9, plus the seasonal impact.

It is worth mentioning that in the first quarter of 2024, the service and other revenue of Xiaopeng Auto will be 1.00 billion yuan (140 million dollars), up 93.1% from 520 million yuan in the same period of 2023, and 22.1% from 820 million yuan in the fourth quarter of 2023.

Special instructions for financial statements:

The annual and quarterly growth is mainly due to the revenue from technology R&D services related to platform and software strategic technical cooperation with Volkswagen Group recorded in the first quarter of 2024.

This is also what the leverage game at the beginning of the article said, and the cooperation with the public has achieved initial results.

In the first quarter of 2024, the sales cost of Xiaopeng Auto will be 5.7 billion yuan ($790 million), up 43.8% from 3.97 billion yuan in the same period of 2023, and down 53.4% from 12.24 billion yuan in the fourth quarter of 2023. The annual growth and quarterly decrease are mainly consistent with the vehicle delivery volume mentioned above.

Another thing to celebrate is that in the first quarter of 2024, the gross profit rate of the company will reach 12.9%, compared with 1.7% and 6.2% in the same period of 2023 and the fourth quarter of 2023, which can be described as a significant increase.

In terms of automobiles, in the first quarter of 2024, the gross profit rate of Xiaopeng automobile products will be 5.5%, - 2.5% in the same period of 2023, and 4.1% in the fourth quarter of 2023.

The annual and quarterly growth was mainly due to the reduction of cost and the improvement of vehicle model product portfolio, and part of the growth was P5 (Configuration |Inquiry) The related inventory impairment and the loss of purchase commitment offset the negative impact of this event on the gross profit margin of automobiles in this quarter by 3.2 percentage points, because the management lowered the sales forecast of P5 because it expected that the expected market demand of new models to be launched would be stronger.

In the first quarter of 2024, the service and other profit margins of Xiaopeng Auto will be 53.9%, compared with 29.6% in the same period of 2023 and 38.2% in the fourth quarter of 2023. The annual and quarterly growth is mainly due to the higher gross profit margin of the aforementioned revenue from technology R&D services.

In terms of research and development, the expenditure in the first quarter of 2024 will be 1.35 billion yuan ($190 million), an increase of 4.2% compared with 1.30 billion yuan in the same period of 2023, and an increase of 3.3% compared with 1.31 billion yuan in the fourth quarter of 2023.

The sales, general and administrative expenses in the first quarter of 2024 will be 1.39 billion yuan ($190 million), up 0.1% from 1.39 billion yuan in the same period of 2023, and down 28.3% from 1.94 billion yuan in the fourth quarter of 2023. The quarterly decrease was mainly due to the decrease of commissions paid to franchise stores and the decrease of marketing, promotion and advertising expenses.

We can find that Xiaopeng Automobile has made progress in cost control.

In addition, the net amount of other income in the first quarter of 2024 was 70 million yuan (US $10 million), up 146.3% from 30 million yuan in the same period of 2023, and down 79.0% from 350 million yuan in the fourth quarter of 2023. The quarterly decline is mainly due to the reduction of government subsidies.

Under the two-way force of revenue growth and cost control, Xiaopeng Auto's operating loss in the first quarter of 2024 was 1.65 billion yuan (230 million dollars), 2.59 billion yuan in the same period of 2023, and 2.05 billion yuan in the fourth quarter of 2023.

The net loss was 1.37 billion yuan ($190 million), 2.34 billion yuan in the same period of 2023, and 1.35 billion yuan in the fourth quarter of 2023.

The net loss attributable to common shareholders was 1.37 billion yuan (US $190 million), compared with 2.34 billion yuan in the same period of 2023, a significant year-on-year increase of 41.47%, although it was still a loss. The fourth quarter of 2023 is a loss of 1.35 billion yuan.

2. Sales growth is lower than that of peers

In the first quarter of 2024, the total delivery of Xiaopeng vehicles will be 21821, an increase of 19.7% compared with 18230 vehicles in the same period of 2023.

Is this number good or not?

The growth of business viewing is good, and the leverage game above has written as high as 62.3%, which is related to the price of cars and the initial success of cooperation with Volkswagen - the business segment of "service and others" has achieved a revenue of 1 billion yuan.

If we compare with peers, according to the statistics of the Automobile Market Research Branch of China Automobile Circulation Association (hereinafter referred to as "Passenger Association"), the cumulative sales of passenger cars in China in the first quarter of 2024 will be 4.832 million, an increase of 13.2% year on year.

Over the same period, the cumulative sales volume of new energy passenger vehicles was 1.772 million, up 34.5% year on year.

That is to say, if compared with the total sales growth rate of the entire passenger car industry, Xiaopeng Automobile still wins; However, if compared with the growth rate of new energy passenger vehicle sales, Xiaopeng Auto lost in the first quarter, and the loss is not small.

In addition, as shown in the figure below, when we look at the ranking of the Passenger Car Association, there is still no Xiaopeng car in the top ten, which I have written many times before.

Chart source | Passenger Car Association (thank you)

According to the business outlook of Xiaopeng Automobile, in the second quarter of 2024, the expected vehicle delivery volume is 29000-32000 vehicles, increasing by 25.0% - 37.9% year on year.

That is to say, on average, about 10000 vehicles a month. To be honest, this delivery volume can only be considered acceptable. It is not a way to go further.

The total revenue in the second quarter is expected to be 7.5 billion yuan - 8.3 billion yuan, an increase of 48.1% - 63.9% year on year.

By the end of March 2024, Xiaopeng Auto's physical sales network has 574 stores, covering 178 cities. In the same period, the self operated charging station network of Xiaopeng Auto reached 1171 charging stations, including 359 Xiaopeng S4 ultra fast charging stations.

By the end of March 2024, Ideal Auto has 474 retail centers in 142 cities, 356 after-sales maintenance centers and ideal auto authorized B&P centers in 209 cities, and 357 ideal overcharge stations with 1544 charging posts have been put into use.

From the perspective of sales channels, Xiaopeng Automobile is no less than the ideal automobile, but the ideal automobile recorded 80400 deliveries in the first quarter, with a year-on-year growth of 52.9% - obviously, the sales volume of Xiaopeng Automobile is not improved, and the problem is not in the sales channels.

According to the latest figures, in April 2024, the number of Xiaopeng cars delivered will be 9393. By the end of April 2024, the cumulative total delivery volume in the year will be 31214 vehicles, which is not easy to see in May and June.

If we compare the financial performance and sales volume of the first quarter report, the leverage game thinks that Xiaopeng Auto is happy and worried, and the key is to launch competitive products.

　　 3. How to achieve progress?

Since 2023, Xiaopeng Automobile has actually thought of many ways, such as cost control just mentioned above.

1) In 2023, the R&D expenditure of Xiaopeng Auto will be 5.28 billion yuan, up 1.2% from 5.21 billion yuan in 2022 - an increase that is negligible. I have written before. I wonder if this has any impact on the product strength and the intelligent driving that Xiaopeng Auto has long advocated?

Not bad, the sales, general and administrative expenses of Xiaopeng Auto in 2023 will be 6.56 billion yuan, down 1.9% from 6.69 billion yuan in 2022.

The year-on-year decrease was mainly due to the reduction of marketing, promotion and advertising expenses.

Compared with the performance disclosure in 2023 and 2022, we will also find that Xiaopeng Auto actually laid off employees in 2023.

As shown in the figure above, Xiaopeng Auto has 15829 employees by the end of 2022, and 13550 by the end of 2023, which will reduce more than 2000 employees.

Among them, the number of R&D personnel decreased from 6313 at the end of 2022 to 5401 at the end of 2023.

The situation of sales and marketing is similar, 6316 by the end of 2022 and 4755 by the end of 2023.

The production department will have 2647 employees by the end of 2022 and 2879 by the end of 2023.

There are also a few changes in general, administrative and operating personnel, as shown in the figure above, I will not say more.

2) On the other hand, cooperation with the public. The performance announcement of the first quarter of 2024 disclosed that on April 17, 2024, Xiaopeng Automobile and Volkswagen Group jointly announced that they had signed a technical strategic cooperation framework agreement on electronic and electrical architecture ("electronic and electrical architecture").

Previously, the company signed a strategic technical cooperation joint development agreement with Volkswagen Group, and the two sides also signed a joint procurement plan, aiming to jointly reduce the cost of the platform.

3) Xiaopeng Automobile is also very competitive in terms of products and intelligent driving. On May 20, 2024, Xiaopeng Auto released XOS 5.1.0 to Xiaopeng Auto users through OTA updates. XOS 5.1.0 integrates AI driven intelligent cockpit functions and XNGP ADAS technology, including AI generation driving and XPlanner equipped with a large model of planning and control based on neural network.

On January 1, 2024, Xiaopeng Auto released Xiaopeng X9 (Configuration |Inquiry) Super Smart Drive big seven seat MPV was delivered in the same month.

He Xiaopeng, Chairman and CEO of Xiaopeng Auto, said, "Through the short-term challenges, Xiaopeng Auto is about to start the big product cycle of launching more than 10 new models in the next three years. We will firmly lead the technology equality of advanced autonomous driving, cover the most mainstream mass market customers, and go to the global market, constantly expand our scale effect, technical advantages, and accelerate the commercialization of technology. "

On the 2024 financial report teleconference, He Xiaopeng said that Xiaopeng Auto officially launched a new brand in Beijing Auto Show in April, and officially entered the auto market between 100000 yuan and 150000 yuan. The first model will be launched and delivered in the third quarter of 2024. According to the senior management of Xiaopeng Automobile in the financial report conference call, the new brand is named“ MONA ”。

MONA is actually Xiaopeng Auto sound of dripping water Smart electric vehicle project acquired by Chuxing. Can Xiaopeng's sinking market strategy work? As mentioned in the leverage game before, Weilai has a similar strategy.

4) In addition, the leverage game saw that He Xiaopeng said that Xiaopeng Automobile would accelerate its overseas expansion in 2024, and planned to expand its overseas sales network to more than 20 countries. "In the first half of the year, we have established cooperative relations with leading dealers in Western Europe, Southeast Asia, the Middle East, Australia and other places, and will successively open new sales outlets," he said.

We can find that the joining of Wang Fengying, a great Wall Motors' star, has made a lot of drastic reforms to Xiaopeng Auto. I wonder whether Xiaopeng Auto's sales will achieve a breakthrough in 2024 while continuing to reduce costs?

By the end of March 2024, the cash and cash equivalents, restricted cash, short-term investments and term deposits of Xiaopeng Auto had amounted to 41.4 billion yuan (5.73 billion dollars). By the end of December 2023, the figure will be 45.7 billion yuan; By the end of 2022, the figure will be 38.25 billion yuan.

Previously, Gu Hongdibo, honorary vice chairman and co president of Xiaopeng Auto, also said, "Our cash in hand at the end of 2023 will exceed 45 billion yuan, and the abundant funds will give us more confidence to achieve high-quality and high-speed growth in a competitive environment."

In terms of money, Xiaopeng Automobile still has some. I hope Xiaopeng Automobile will withdraw from good products and sell well in the second half of 2024.

After the release of the first quarterly report, the stock price of Xiaopeng Auto experienced a sharp rise in both the US and Hong Kong stocks. Then, due to some factors, the stock price of its Hong Kong shares fell a little on May 23.

　　 The financial charts not indicated in this article are all from relevant announcements of Xiaopeng Auto, and we hereby explain and thank you

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