Bank of America Securities raises XPeng's target price to 109 yuan, with third-quarter losses better than expected

Bank of America Securities research report indicates that XPeng (09868.HK) achieved revenue of RMB 20 billion in the third quarter, representing year-on-year and quarter-on-quarter growth of 102% and 12%, respectively, which is broadly in line with the bank's expectations. The overall gross margin was 20.1%, an increase of 4.8 and 2.8 percentage points year-on-year and quarter-on-quarter, better than the bank's expected 17.7%. The vehicle profit margin was 13.1%, up 4.5 percentage points year-on-year but down 1.2 percentage points quarter-on-quarter, mainly due to promotions for inventory clearance. During the period, the non-GAAP net loss was RMB 152 million, better than the bank's expected net loss of RMB 398 million.

Looking ahead to the fourth quarter, XPeng's management expects delivery volumes to be between 125,000 and 132,000 vehicles, representing a year-on-year growth of 37% to 44%, with revenue projected to be between RMB 21.5 billion and 23 billion, a year-on-year growth of 34% to 43%.

The bank has lowered its sales forecast for XPeng in 2025 by 1%, but raised its forecasts for 2026 and 2027 by 3% and 5%, respectively; it has also reduced its 2025 non-GAAP net loss forecast from RMB 1.094 billion to RMB 884 million, while lowering the non-GAAP net profit forecasts for 2026 and 2027 by 20% and 9%, respectively. The bank has raised its target price for XPeng's Hong Kong stock from HKD 105 to HKD 109, and for its U.S. stock (XPEV.US) from USD 27 to USD 28, reflecting the upward revision of sales forecasts, and reiterated a "Buy" rating, optimistic about the strong product layout in 2026