JP Morgan: reiterate "overweight" rating on XPENG-W (09868), optimistic about AI layout and new car cycle.

JPMorgan released a research report stating that, based on non-GAAP criteria, XPENG-W (09868) is expected to achieve a 50% to 70% higher annual profit for the 2025 fiscal year compared to the bank's and market expectations, performing impressively. The group achieved a quarterly profit for the first time in the fourth quarter of last year, with the net loss narrowing for the full year, mainly benefiting from increased car sales, optimized product portfolio, and positive contributions from non-automotive businesses (such as after-sales service, automotive finance, and Volkswagen automotive technology services fees). The bank maintains a "hold" rating on XPENG's Hong Kong and ADR shares, with a target price of HK$135 for the Hong Kong shares and $34 for XPENG.US. The bank stated that the management detailed the group's long-term strategy with physical artificial intelligence and AI-enabled mobility technologies at its core, covering autonomous driving, humanoid robots, and high-performance computing power, and listed specific near-term catalysts for 2026, including accelerating overseas product layout, launching VLA2.0 assisted driving, commercializing autonomous driving technology, mass production of humanoid robots, and new vehicle cycles. JP Morgan believes that XPENG and NIO-SW (09866) are core recovery trade targets in the Chinese automotive industry and sees them as attractive buying opportunities for 2026. With expectations for leading technology layout, a strong new vehicle cycle in 2026, continuous improvement in profitability, solid overseas growth momentum, and diversified business contributions, XPENG's stock price is expected to undergo further revaluation.