Investment Rating - The report maintains a "Buy" rating for Xiaopeng Motors (9868.HK) with a target price of HKD 80.45, indicating a strong potential for stock performance in the upcoming months [1][13]. Core Insights - Xiaopeng Motors reported a significant improvement in gross margins for its automotive business in Q2 2025, with a gross margin of 14.3%, an increase of nearly 4 percentage points quarter-over-quarter. The company also achieved a delivery volume of 103,181 units, reflecting a year-over-year growth of 241.6% [3][6]. - The company’s revenue for Q2 2025 reached CNY 18.27 billion, marking a year-over-year increase of 125.3% and a quarter-over-quarter increase of 15.6%. The net profit attributable to shareholders was a loss of CNY 480 million, which narrowed by 62.8% year-over-year [3][6]. Financial Performance Summary - **Revenue Projections**: Expected revenues for 2025 are projected at CNY 81.97 billion, with a year-over-year growth rate of 100.6% [5][11]. - **Net Profit Forecast**: The net profit forecast for 2025 is a loss of CNY 1.21 billion, improving to a profit of CNY 2.28 billion by 2026 and CNY 4.68 billion by 2027 [5][11]. - **Gross Margin Trends**: The gross margin is expected to improve from 14.3% in 2025 to 18.9% by 2027, indicating a positive trend in profitability [5][11]. - **Earnings Per Share (EPS)**: The EPS is projected to improve from -CNY 3.04 in 2024 to CNY 2.46 by 2027 [5][11]. Delivery and ASP Insights - The average selling price (ASP) of vehicles increased to CNY 164,000, attributed to a decrease in the proportion of lower-priced models and an increase in higher-priced models [6]. - The company has provided guidance for Q3 2025 deliveries between 113,000 to 118,000 units, with expected revenue between CNY 19.6 billion to CNY 21 billion [6]. Strategic Developments - Xiaopeng Motors is focusing on enhancing product design and has initiated pre-sales for the new generation P7, which has already surpassed previous models in pre-order numbers. The company plans to launch the X9 model, marking the start of a new product cycle [7][6]. - The collaboration with Volkswagen on electronic and electrical architecture is expected to boost service and other income, with Q2 2025 service revenue at CNY 1.39 billion [6]. Conclusion - The report indicates a strong outlook for Xiaopeng Motors, driven by improving margins, increasing ASP, and a robust product pipeline. The company is positioned to capitalize on its strategic initiatives and market trends in the automotive sector [6][7].

Investment Rating - The report maintains a positive outlook on the automotive and automotive parts industry, particularly focusing on intelligent driving and high-end vehicle transitions [6]. Core Views - The report highlights the strong demand for passenger vehicles, with a notable increase in sales and a significant rise in new energy vehicle penetration [3][10]. - It emphasizes the acceleration of intelligent driving technology and its adoption across different market segments, indicating a shift towards efficiency optimization rather than just hardware competition [2][9]. - The report suggests that the automotive sector is experiencing a recovery phase, driven by new vehicle launches and supportive government policies aimed at stimulating consumer demand [11][20]. Summary by Sections 1. Weekly Insights - Passenger vehicle demand is improving, with intelligent driving technology gaining traction and high-end models evolving [9]. - The report recommends focusing on quality domestic car manufacturers such as Geely, BYD, and Xpeng, which are expected to benefit from the ongoing trends in smart and globalized automotive solutions [11]. 2. Market Performance - The automotive sector underperformed compared to the broader market, with a slight decline in stock prices during the reporting period [26]. 3. Weekly Data - In the fifth week of May 2025, passenger vehicle sales reached 466,000 units, marking an 18.3% year-on-year increase and a 16.7% month-on-month increase [3][10]. - The penetration rate of new energy vehicles was reported at 53.1%, indicating a slight decrease from the previous month [3][10]. 4. Key Companies and Recommendations - The report identifies key companies in the automotive parts sector, recommending firms involved in the new energy vehicle supply chain and intelligent driving technologies [4][12]. - Specific recommendations include companies like Berteli, Top Group, and New Spring, which are positioned well within the evolving market landscape [4][12]. 5. Policy Impact - Recent government policies aimed at promoting vehicle upgrades and stimulating demand are expected to support the automotive market, particularly for new energy vehicles [20][39].

Investment Rating - The report maintains a positive outlook on the automotive and automotive parts industry, particularly focusing on intelligent driving and high-end vehicle transitions [6]. Core Viewpoints - The demand for passenger vehicles is improving, with a notable increase in sales and a strong performance from new energy vehicles. The intelligent driving sector is expected to accelerate its adoption, driven by competitive pricing and technological advancements [2][3]. - The report highlights the importance of strong product cycles and recommends focusing on companies with robust fundamentals and intelligent driving capabilities [3][10]. Summary by Sections 1. Weekly Insights - The report emphasizes the synergy between the down-market penetration of intelligent driving and the leap to high-end models, predicting a rapid adoption of intelligent driving technologies [2][9]. - It suggests that companies like Geely, BYD, and Xpeng are well-positioned to benefit from these trends [3][10]. 2. Market Performance - The automotive sector underperformed the market, with a slight decline of 0.01% in the A-share automotive sector during the week of June 3-6, 2025, ranking 25th among sub-industries [26]. 3. Sales Data - In the fifth week of May 2025, passenger vehicle sales reached 466,000 units, marking an 18.3% year-on-year increase and a 16.7% month-on-month increase. New energy vehicle penetration was at 53.1% [3][10]. 4. Key Companies and Recommendations - The report recommends focusing on companies with strong product cycles and intelligent driving capabilities, including Geely, BYD, Xpeng, and Li Auto [3][10]. - For the parts sector, it suggests investing in companies like Top Group and New Spring Co., which are well-positioned in the new energy vehicle supply chain [4][12]. 5. Intelligent Driving and Electric Vehicles - The report anticipates a significant shift in the intelligent driving landscape, with companies like BYD leading the charge in technology and market penetration [13]. - It highlights the importance of the new energy vehicle supply chain and suggests that companies with self-research capabilities will benefit from the evolving market dynamics [12][13]. 6. Motorcycles and Heavy Trucks - The motorcycle market is experiencing growth, particularly in the mid-to-large displacement segment, with companies like Chunfeng Power being recommended [17][19]. - The heavy truck market is expected to recover due to new policies supporting the replacement of older vehicles, with recommendations for companies like China National Heavy Duty Truck Group [20][21]. 7. Tire Industry - The tire industry is projected to benefit from ongoing globalization and demand recovery, with recommendations for leading companies like Sailun Tire and high-growth firms like Senqilin [22][25].

Investment Rating - The report maintains an "Outperform" rating for the company, indicating an expected relative performance exceeding the benchmark index by over 10% in the next 12-18 months [2][8]. Core Insights - The company achieved a revenue of 40.87 billion RMB in 2024, representing a 33% year-over-year increase, with Q4 revenue reaching 16.11 billion RMB, up 23% year-over-year and 59% quarter-over-quarter [8]. - The net loss for 2024 was narrowed to 5.79 billion RMB, with Q4 net loss at 1.33 billion RMB, showing improvement [8]. - Vehicle sales revenue in Q4 was 14.67 billion RMB, up 20% year-over-year and 67% quarter-over-quarter, driven by increased deliveries of 92,000 units, which is a 52% year-over-year and 97% quarter-over-quarter increase [8]. - The company is expected to continue strong performance in 2025, with a forecast of 91,000-93,000 vehicle deliveries in Q1, representing a year-over-year increase of 317%-326% [8]. Financial Data and Forecast - Revenue projections for 2025, 2026, and 2027 are 90.83 billion RMB, 130.71 billion RMB, and 152.66 billion RMB respectively, with net profits expected to be -1.2 billion RMB, 2.9 billion RMB, and 6.5 billion RMB [2][8]. - The gross profit margin (GPM) improved to 14.3% in 2024, up 12.8 percentage points year-over-year, with Q4 GPM at 14.4% [8]. - The company plans to expand its global presence, targeting over 60 countries by the end of 2025, with a goal for overseas sales to account for 50% of total sales in the next 10 years [8]. Valuation - The report uses the Price-to-Sales (PS) method for valuation, estimating PS ratios of 1.8, 1.3, and 1.1 for 2025, 2026, and 2027 respectively [8]. - The target price is set at 103.90 HKD, based on a PS of 2.0 times for 2025 [8].