31 August 2020 10:41
Should you buy the Xpeng stock (NYSE: XPEV) now? Guangzhou, China-based electric vehicle company Xpeng Inc. (NYSE: XPEV) recently went public on the NYSE and its IPO went rather well despite the tensions between the U.S. and China. When the company went public, it sold 99.7 million American Depositary Shares ADS) at $15 each, which raised about $1.5 billion. Originally, the company was planning to sell 85 million shares at price guidance of between $11 and $13.
By going public, it enables Xpeng to have more access to higher amounts of capital, which will be needed to effectively compete against companies like Nio, WM Motor, Li Auto, and Tesla. Currently, Xpeng sells two electric vehicles, including the G3 SUV and the P7 sedan. The production of the G3 SUV started in November 2018 and as of July 31, Xpeng delivered 18,741 of them to customers. In 2019, Xpeng's revenue was $328.54 million, of which $307.32 million was from vehicle sales. Even though the company is operating at a significant loss, it is worth considering how long it took Tesla to turn a profit.
Tesla had turned its first annual profit in the final 3 months of 2019 after being public for 10 years and the company was originally founded in 2003. Next year, Xpeng is also planning to launch a new sedan followed by a larger SUV in 2022. Some of Xpeng's investors prior to the company going public include Jack Ma, Xiaomi, and the Qatari sovereign fund. In my opinion, Xpeng went public at the right time. The demand for electric vehicles has been surging and it is estimated that China accounts for over 45% of global EV sales volumes and is already at 3.5 times larger than the U.S. market, according to capital.com. And data from IHS Markit is pointing to an expected compounded annual growth rate of China EV sales at 29.4% through 2025. Xpeng is also going to reap the benefits from the improving economies of scale in relation to the battery cost. When the company went public on Thursday, August 27, the stock price jumped 40% from $15 to $21.22. Based on what I'm seeing, I plan to start buying shares of Xpeng this week using a buy-and-hold method for fractional shares in the company and a dollar-cost averaging strategy. I strongly believe Xpeng has long-term potential based on the metrics I am seeing. Disclosure: I wrote this article myself and I do not have any business relationship with any company whose stock I write about. Do you have to purchase the Xpeng stock (NYSE: XPEV) now? Guangzhou, China-based electrical car firm Xpeng Inc. (NYSE: XPEV) just lately went public on the NYSE and its IPO went somewhat nicely regardless of the tensions between the U.S. and China. When the corporate went public, it bought 99.7 million American Depositary Shares ADS) at $15 every, which raised about $1.5 billion. Initially, the corporate was planning to promote 85 million shares at price steerage of between $11 and $13. By going public, it allows Xpeng to have extra entry to increased quantities of capital, which can be wanted to successfully compete towards firms like Nio, WM Motor, Li Auto, and Tesla. At the moment, Xpeng sells two electrical automobiles, together with the G3 SUV and the P7 sedan. The manufacturing of the G3 SUV began in November 2018 and as of July 31, Xpeng delivered 18,741 of them to clients. In 2019, Xpeng's income was $328.54 million, of which $307.32 million was from car gross sales. And the 2019 whole price of gross sales was $407.55 million. Although the corporate is working at a big loss, it's worth contemplating how lengthy it took Tesla to show a revenue. Tesla had turned its first annual revenue within the ultimate Three months of 2019 after being public for 10 years and the corporate was initially based in 2003. Subsequent yr, Xpeng can be planning to launch a brand new sedan adopted by a bigger SUV in 2022. A few of Xpeng's buyers previous to the corporate going public embody Jack Ma, Xiaomi, and the Qatari sovereign fund. For my part, Xpeng went public on the proper time. The demand for electrical automobiles has been surging and it's estimated that China accounts for over 45% of worldwide EV gross sales volumes and is already at 3.5 occasions bigger than the U.S. market, in line with capital.com. And information from IHS Markit is pointing to an anticipated compounded annual progress price of China EV gross sales at 29.4% by way of 2025. Xpeng can be going to reap the advantages from the enhancing economies of scale in relation to the battery price. And it's projected to fall by a compounded annual price of 10% for the following Three years, thus producing incremental revenue per unit bought. When the corporate went public on Thursday, August 27, the stock price jumped 40% from $15 to $21.22. After which the stock price went up once more 7.4% from $21.22 to $22.79 on Friday. Analysts are ready for extra information equivalent to quarterly earnings to make suggestions on whether or not to purchase the stock or not. Primarily based on what I'm seeing, I plan to start out shopping for shares of Xpeng this week utilizing a buy-and-hold technique for fractional shares within the firm and a dollar-cost averaging technique. I strongly imagine Xpeng has long-term potential primarily based on the metrics I'm seeing.