Xpeng 🔋🚘 - XPEV

Imo XPEV was priced the most aggressively from the start, if you compare to Nio and Li. Due to the lower-end focus its less profitable (not expected to even be EBITDA positive in 2022) yet trading at similar multiples to NIO. Possibility of more debt or dilution. Probably worth around $10-15b as of now but obviously all of its comps are dropping too.

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10% growth on previous month is a really encouraging sign given the semi-conductor shortage.

Key Points

  • China has restricted several companies that had U.S. IPOs in 2021.
  • These 3 companies all raised significant sums in the U.S. last year.
  • New restrictions could spell trouble – but it isn’t yet clear.

What happened

The U.S.-listed shares of several Chinese electric-vehicle makers were trading down on Wednesday after the Chinese government imposed restrictions on ride-hailing giant DiDi Global (NYSE:DIDI)following its initial public offering in New York.

Here’s where things stood for these three companies’ American depositary shares as of 1 p.m. EDT, relative to their closing prices on Tuesday.

  1. Li Auto (NASDAQ:LI) was down about 4.6%.
  2. NIO (NYSE:NIO) was down about 6.9%.
  3. Xpeng (NYSE:XPEV) was down about 5.9%.

So what

China’s government said earlier this week that it has launched cybersecurity reviews on DiDi and several other Chinese companies that have listed on U.S. markets in 2021, including Full Truck Alliance (NYSE:YMM) and Kanshun Limited (NASDAQ:BZ). The government’s concern is apparently that the audits and oversight required of U.S.-listed companies could compromise the security of Chinese consumers’ information.

The near-term consequences aren’t trivial: For the moment, DiDi isn’t allowed to register new users – a restriction that will sharply limit its growth potential until (and unless) the company works things out with regulators.

It’s not yet clear what that means for Li Auto, NIO, and Xpeng, all of which listed in the U.S. before 2021. My thinking right now is that the companies themselves aren’t likely to be hit with significant fines or penalties. But if they’re no longer able to offer new shares in the United States, an important avenue of funding will be closed off.

NIO’S PLANS TO RAMP UP PRODUCTION COULD BE SLOWED IF THE COMPANY’S ABILITY TO RAISE MONEY IN THE U.S. IS RESTRICTED. IMAGE SOURCE: NIO, INC.

As any auto investor knows, auto manufacturing requires big capital commitments up front – capital commitments that have to be sustained through economic cycles. While all three of these companies took advantage of last year’s bull market to bolster their balance sheets and cash reserves via offerings to U.S. investors, they might not be able to do so again in the future.

That’s one concern here, and if you own any of these three stocks, it’s something to watch.

Now what

We might have to wait until these companies report second-quarter earnings to get a clearer understanding of how China’s enforcement actions might (or might not) affect their businesses. None of the three have yet announced dates for their earnings reports, but I expect all three sometime in mid-August.

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Wonder what this all means for xpeng and whether to dump and run elsewhere?

Bad news clearly

Anyone know what’s causing the stock to jump today?

Xpeng hoping to launch a flying car that can also drive on roads in 2024.

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Looks cool but not sure the car would be practical if the propellers and arms fold away. I can only imagine the panels open to hide it but that would leave next to no space for inside. I think some new tech is needed to make it actually viable more than a PR gimmick/proto-type.

I dunno, the DJI drones like the Mavic, showed that (as a proportion of body), folding drones could stow their appendages pretty neatly. I agree re. this design, they are clearly trying to do a “cybertruck” whet appetites stunt then follow through at some semi-undisclosed point in the future. The bigger issue is, the world is barely ready for self-driving, let alone self driving-flying. :smiley:

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Just had a look at these and see your point but not sure that would be possible when lifting humans and cargo.

Not sure if I am in the correct discussion here, I am very interested in investing in NIO, XPENG and BYD. FT has the platform for NIO and XPENG. Looking at BYD I can see they are in the Shenzhen stock exchange, is there a way into that stock exchange through FT. Could anyone advise me on this? Is China worth any aggravation with investing there? Thanking you in advance Mark

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For small volumes don’t bother buying $ based shares on ft, I find the exchange fees kill your profit unless you are thinking of longterm hold. Etfs in gbp focused on an area you’re interested in could be better and less stressful than picking individual winners in a different currency

Thank you for a prompt reply. Next question? Where will a find an etf covering EV, preferably world wide?

I like £chrg good worldwide spread and has the full ev exposure eg chemical manufacturer, battery manufacturer, ev producers etc. Good exposure to Chinese companies, Korean and US.

If your profit is damaged too much by 0.45% FX fee you’re not investing your trading/gambling.

£CHRG has an annual fee of 0.40% which is basically the same as the FX fee. I make no judgement on the benefits of an ETF/Individual stock in this case but the cost are basically the same.

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Interesting seeing xpeng grow and Nio linger. I remember reading many articles plumping for Nio over Xpeng when they listed. I hold a little of both, but interesting watching them. Not to mention Li.

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How low are we thinking this will go i have 800 to put in just waiting for right time

possibly to zero, as with most chinese growth stocks

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Hmm. Not zero yet then.

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