Both these companies along with local rival Li Auto offer attractive products aimed at the mid- to high-end spectrum of the Chinese BEV market, which is increasingly being spoilt for choice.
Now, the company’s Q2 results are expected sometime in the latter half of August. Two items of particular interest to watch for would be:
Whether the company announces a mass-market marque, just like NIO, in a bid to take its high-quality engineering expertise to the “budget” end of the BEV market in China. The company’s increased production capacity certainly has room for a foray in that.
Whether there is an improvement in earnings attributable per ordinary share to bring the trend for the year below that of the past two years’ recorded metrics.
The company’s President Mr. Brian Gu had already stated that he hopes the company will break even by the end of 2023. While plans were announced by the company that it would go deeper into Europe (i.e. beyond its modest market share in Norway) by entering the German, Swedish and Dutch markets later this year, no timetable has been announced yet. This could be another facet of information to consider, if further light is shed on it in the upcoming earnings call.
Long-term investors intending with the wherewithal to hold the stock over a long period of time might see their investment bear decent gains after a period of 2-3 years. In the immediate term, however, the stock’s relation to the broader “tech” market’s weakness is a hurdle. However, another interesting facet to keep in mind is the recent boom in Emerging Markets stocks – which the likes of XPeng and NIO could be considered to gain from, since most of their business is in China.
