Bank of China International: maintains a "buy" rating on XPENG-W (09868) with a target price of 70 Hong Kong dollars.

released a research report, maintaining a "buy" rating for XPENG-W (09868) with a target price of 70 Hong Kong dollars. The bank mentioned that Xpeng has recently been driven by AI, leading to a significant increase in its stock price. Therefore, there is a possibility of a short-term price pullback or volatility, but with the intensive release of new cars in the second quarter, the stock price is expected to rebound. The bank predicts that Xpeng's fourth-quarter revenue will increase by about 60% quarterly to 16.2 billion Chinese yuan, lower than the nearly doubled quarterly growth in sales volume, mainly due to the increase in the proportion of low-priced MONA sales weakening the product structure. The bank pointed out that due to the decrease in the proportion of high-margin technical service income, the group's fourth-quarter automotive profit margin is expected to continue to improve quarterly to about 9%, but the overall gross profit margin may decline by more than 1 percentage point quarterly. Considering the economies of scale reducing operating expenses, the bank estimates that the fourth-quarter adjusted net loss will narrow from 1.5 billion Chinese yuan in the third quarter to 1.2 billion to 1.3 billion Chinese yuan. China International Bank stated that considering weak demand in the first quarter during the Lunar New Year and the pace of new car model releases, the group is expected to deliver 80,000 to 85,000 vehicles in the first quarter, significantly better than the industry average despite a slight quarterly decline. Starting from March, the company will enter a period of intensive new car launches. The bank believes that the group's target of doubling sales year-on-year can be easily achieved. In addition, if subsequent new car feedback is positive, the target price may be adjusted upwards.