Xpeng X9 electric MPV on display at the Beijing Motor Show on April 25, 2024.
CNBC | Evelyn Chen
BEIJING — Chinese electric car company Spen The company’s stock price soared after it reported improved margins and a positive outlook for second-quarter deliveries.
Company’s Hong Kong listed stock Shares rose more than 13% in Wednesday morning trading. U.S.-listed stocks rose nearly 6% in U.S. trading Tuesday after the first quarter results were announced.
Xpeng reported that its auto margins rose 5.5% in the first three months of the year, up from minus 2.5% in the previous quarter. Auto margins are a measure of profitability, and the higher the margin, the more profit a company is making on car sales.
The company expects to deliver 29,000 to 32,000 vehicles in the second quarter, an increase of at least 25% from the same period last year.
Xpeng Motors delivered 21,821 units in the first quarter of this year and 9,393 units in April.
Following the earnings release, Nomura analysts said in a note on Wednesday they were reassessing their forecasts for Xpeng.
“Overall, XPENG is progressing with its business plan and believes it will be able to achieve some development going forward,” the report said.
“Meanwhile, given the increasing competition across the market and the increased vulnerability of small businesses, we remain somewhat cautious and will carefully review the new models launching under the MONA brand next month,” Nomura analysts said. We recommend that investors monitor this.”
Like other companies trying to stay competitive in China’s electric vehicle market, Xpeng is expanding its product lineup with a low-cost car brand called Mona.
The company said the first Mona car, an electric sedan priced under 200,000 yuan ($27,890), will go on sale in June, with mass deliveries expected to begin in the third quarter.
Xpeng believes its partnership with German automaker Volkswagen has generated hundreds of millions of yuan in service revenue. In the first quarter, the service sector’s overall sales amounted to 1 billion yuan, an increase of 93.1% year-on-year.
The Chinese company said it plans to partner with auto dealer groups in Western Europe, Southeast Asia, the Middle East and Australia to open new stores in the first half of the year, and said it plans to expand its sales network to more than 20 countries, according to a first-quarter earnings report recorded by FactSet.
