XPeng (XPEV) releases its latest earnings report this week after the stock consolidated in recent days.
XPEV – Daily Chart
XPEV stock bounced from lows at 17.29 in July, and the near-term gains were capped at 21.61. The stock now trades at 19.70 in the middle of the range, and those two levels should be watched for a breakout.
XPEV stock was hurt by sales data from China last week after a recent crackdown on price cuts following heated competition in the sector. The China Association of Automobile Manufacturers (CAAM) said that total EV deliveries, comprising passenger and commercial vehicles, were lower by -5% on a monthly basis to 1.26 million units in July.
XPeng releases its latest earnings report on Tuesday, and the electric-vehicle maker’s second-quarter net loss is expected to narrow further to 940.9 million yuan, or US$131 million, according to Visible Alpha data. That was compared to a 1.28 billion yuan loss in the same period a year earlier.
On the revenue front, analysts are expecting to see 18.69 billion yuan, compared with 8.11 billion yuan a year earlier. The automaker also reported a record 103,181 delivery units in the second quarter of the year.
The company’s shares fell 10% in the second quarter, due to policy uncertainties and the weaker demand picture in China’s auto market. However, with the current financial trends, XPeng is expected to show profitability by the fourth quarter.
There are new vehicle launches coming in the second half of this year, which leads Nomura analysts to believe that the company is entering a strong uptrend, with increased shipments, higher average selling prices and margins.
Management guidance for the rest of the year could guide the stock this week, and a breakout or level test is possible. Recent price cut easing can add upside to premium model sales.
Xpeng added this week that its new P7 electric sedan has completed a 24-hour endurance test of 4,000 km, setting a new record.
