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An Xpeng P7 car is displayed at the Beijing Motor Show in Beijing on September 27, 2020.
WANG ZHAO / AFP via Getty Images
Chinese electric vehicle starter
XPeng
reported strong fourth quarter deliveries on Sunday night.
The company delivered 5,700 vehicles in December 2020, compared to 4,224 in November and up 326% compared to December 2019. For the entire fourth quarter, XPeng (ticker: XPEV) delivered 12,964 vehicles.
Deliveries exceeded XPeng’s initial projections. XPeng management said in its third quarter earnings conference call that it expected to deliver around 10,000 vehicles in the fourth quarter.
All three Chinese EV stocks listed in the U.S. had a busy weekend, with each reporting delivery numbers. The theme was the same for everyone – XPeng, along with
NIO
(NIO) and
Li Auto
(Li) surpassed the internal projections. NIO delivered more than 17,000 vehicles, about 1,000 more than projected management. Li delivered more than 14,000 vehicles, about 3,000 more than the administration had predicted.
EV leader
Tesla
(TSLA) also reported fourth quarter deliveries over the weekend. Elon Musk’s company delivered more than 180,000 vehicles in the fourth quarter, which was better than the approximately 176,000 vehicles designed by analysts.
Predicting investor reaction to Chinese EV ads is not easy. All three stocks fell after reporting strong deliveries in November. Although Li sold more shares to raise money around the time the three released November delivery numbers.
Falling into good news, however, is a common bull market action, and EV stocks are definitely bullish. Tesla rose about 740% in 2020 and is now the most valuable car company in the world by a wide margin. XPeng’s shares closed 2020 at $ 42.83, substantially above its summer IPO price of $ 15 per share.
The gains make XPeng, and the Chinese EV sector as a whole, expensive. XPeng, for example, negotiates about 15 times the sales estimated in 2021. Barron’s recently wrote that Chinese EV shares look very expensive. This article appeared in mid-December, and Chinese EV shares, on average, are traded on where they were before.
Wall Street, for the most part, disagrees Barron’s. More than 60% of analysts rate the three Chinese EV stocks – NIO, Li and XPeng – in Buy. The average purchase rating ratio for shares in the
Dow Jones Industrial Average
is about 57%.
For XPeng, 67% of analysts covering the company value the shares in Buy. The analyst’s average price is around $ 49 per share.
Monday must be an interesting day. Investors also have to deal with Tesla’s recent Model Y prices in China. The Model Y crossover is priced below a NIO EC6. The XPeng EV crossover – the G3 model – is priced lower than the NIO and Tesla. But any concerns among investors about price cuts can be offset by this weekend’s delivery numbers.
Write to Al Root at [email protected]