Beast Finance's Core Viewpoints:

(1) Xpeng Motors' share price has retreated slightly over the past few days.

(2) The company's business is developing well amidst rising demand.

(3) Beast Finance's technical analysis of Xpeng Motors' share price: Bulls have set their sights on the 50% Fibonacci retracement level at $15, indicating potential upside of 40%.

Since reaching a high of $13.73 on September 30 (when many Chinese stocks were rallying), Xpeng Motors' (XPEV) share price has retreated, falling to as low as $10 at one point. This represents a 54% decline from its year-to-date high, suggesting local weakness in the stock.

JPMorgan Chase is bullish on Xpeng Motors

JPMorgan Chase (JPM) previously stated that Xpeng Motors' share price would rise to $14, representing a 30% upside potential from current levels.

JPMorgan Chase believes that several catalysts will drive Xpeng Motors' share price higher, including the company's upcoming new product strategy and its accumulated advantages in technology.

At the P7+AI Autonomous Driving Technology Sharing Conference to be held this week (October 24), Xpeng Motors will unveil its AI Tianji 5.4.0 version, showcasing the latest intelligent driving technology to the industry and seeking to surpass competitors such as NIO (NIO) and BYD (01211) in technology.

JPMorgan Chase believes that Xpeng Motors will benefit as more Chinese consumers embrace electric vehicles, and predicts that electric vehicles will account for 60% of total vehicle sales in China by 2030.

Xpeng Motors' business is developing well

A major challenge facing Xpeng Motors and other electric vehicle manufacturers in the future is that their revenue and sales growth will continue to slow down in the coming years, and competition in the industry will intensify further.

However, the reality is that demand for Xpeng Motors and other Chinese electric vehicle companies remains strong. For example, Xpeng Motors delivered 21,352 vehicles in September, an increase of 40% over the same period in 2023. The Xpeng MONA M03, which began deliveries in September, sold 10,000 units in that month alone.

Its total deliveries for the second quarter also increased by 16% to 46,533 units.

Analysts at JPMorgan Chase expect Xpeng Motors' fourth-quarter deliveries to increase by 77% with the help of the MONA M03 brand.

Most importantly, Xpeng Motors has expanded its operations in other countries, particularly in Europe. For example, it has recently launched the G9, G6, and P7 in Spain and Portugal. Although Europe has announced tariffs on electric vehicles imported from China, Xpeng Motors' manufacturing and technological advantages mean that many Europeans can still afford to buy them even with the tariffs.

The latest data shows that Xpeng Motors delivered a total of 30,207 vehicles in the second quarter, an increase of 30% over the same period last year. This growth is primarily due to the increase in the number of its stores to 611. In particular, the company's self-operated charging stations have grown to 1,298, and this growth trend is expected to continue in the short term.

In addition, Xpeng Motors' quarterly profit margin is also growing, with gross margin increasing from -3.9% in 2023 to 14%.

Most importantly, Xpeng Motors' losses are decreasing. The net loss in the last quarter was reduced to $1.28 billion, down from $2.8 billion in the second quarter of 2023.

Xpeng Motors is also financially strong. As of the end of the last quarter, the company had $1.9 billion in cash and short-term investments. In addition, it had $474 million in restricted cash, $1.5 billion in short-term deposits, and $73 million in restricted short-term deposits.

Overall, Xpeng Motors currently has $6.15 billion in current assets and $4.1 billion in current liabilities, which means it has over $2 billion in working capital. Therefore, the company is unlikely to raise additional funds in the short term (and does not need to worry about funding).

Wall Street analysts believe that Xpeng Motors will continue to perform well in the short term. Third-quarter revenue is expected to reach $1.37 billion, an increase of 15.5% over the previous year. Additionally, annual revenue is projected to grow by 335%.

Xpeng Motors itself expects its losses to continue to decrease, with the loss per share expected to decrease to 77 cents this year and 43 cents next year.

Technical Analysis of Xpeng Motors' Share Price

The daily chart shows that Xpeng Motors' share price bottomed out at $6.57 in April and August, forming a double bottom pattern, which is one of the most bullish signals in technical analysis.

And now it has broken through the key resistance level of $10.50.

Most importantly, from a technical analysis perspective, the stock has also formed a golden cross of the 200-day and 50-day exponential moving averages (EMAs), which is also one of the most bullish signals in technical analysis.

Therefore, Xpeng Motors' share price may continue to rise in the future, as bulls have set their sights on the 50% Fibonacci retracement level at $15, indicating potential upside of 40%.