Xiaopeng's new G9 is expected to sell well, with analysts giving a target price that doubles.

Xiaopeng G9 2024 model has been officially released, with 5 different configurations available: 570Pro, 720Pro, 570Max, 702Max, and 650Max, priced at 263,900/283,900/289,900/309,900/359,900 yuan respectively.

Compared to the previous G9 model, the price has been significantly reduced, with a decrease of 46,000 yuan in the starting price. The Pro/Max versions have also seen a reduction of 66,000/60,000 yuan respectively for the same configuration. The price of the mid-size SUV intelligent driving version has been lowered to below 300,000 yuan.

Xiaopeng has become a strategic partner of Didi and Volkswagen's ecosystem Tier 1, which is expected to achieve resource sharing, technological resonance, cost reduction, and efficiency improvement, with the potential for double growth in sales and profits.

Can the 2024 G9 become a hit?

Huatai Securities believes that the cost-effectiveness of the 2024 G9 has been improved and sees great sales potential. With the launch and immediate delivery of the G9, it is expected to become a popular model in its price range, with strong growth in sales and revenue.

Dongwu Securities stated that the price reduction exceeded expectations, and delivery can begin in the second week after the launch of the G9, accelerating the delivery process and ensuring a steady and robust growth in orders.

Leading the industry in intelligent driving, strong new car cycle

Xiaopeng expects to cover 50 cities with XNGP by the end of the year, mainly concentrated in the Beijing-Tianjin-Hebei, Yangtze River Delta, and Pearl River Delta regions. In October, it is expected to be the first to launch the imageless XNGP in Beijing and other regions, and by the middle of next year, it will increase to 200 cities and enable automatic recognition of residential areas and company parking spaces.

In terms of new cars, Xiaopeng's new MPV model, the X9, is expected to be launched in Q4 2023, supporting XNGP's full-scenario navigation-assisted driving function, which is expected to boost sales.

In 2024, it is expected to launch 1-2 new products to enhance the product matrix in the 150,000-300,000 yuan price range, expand XNGP's coverage to more cities, and enhance product competitiveness, maintaining an upward momentum.

Investment recommendations

Huatai Securities adopts a branch valuation method and gives a valuation of 1.5x 2024 EPS for Xiaopeng's car sales business, and a valuation of HKD 35 billion for its technology service-related business.

It is estimated that MONA will bring an increase in sales of 50,000/100,000 vehicles in 2024/2025, corresponding to revenues of RMB 82.2/115.9 billion in 2024/2025, respectively. The corresponding target prices are HKD 97.78/103.73 (previously HKD 97.10). A target price of HKD 97.78 is given, maintaining a "buy" rating.

Dongwu Securities believes that considering Xiaopeng's leading intelligent driving algorithm capabilities and continuous software supply charging, Xiaopeng should enjoy a higher valuation compared to Tesla. It maintains a 2024 target PS of 5X for Xiaopeng, corresponding to a target price of HKD 197. The current stock price is HKD 68 (as of September 20, 2023), maintaining a "buy" rating.