While the global chip shortage continues to impact Chinese EV companies, the industry has immense long-term growth potential. So, popular Chinese EV stocks NIO Inc. (NIO), XPeng Inc. (XPEV), and Li Auto Inc. (LI), which beat their third-quarter vehicle sales estimates, could be worth watching.
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Despite the semiconductor chip shortage severely affecting the electric vehicle (EV) industry, EV sales of Chinese companies have gotten a boost due to government subsidies and other preferential policies. In addition, the Chinese government would like 20% of new cars sold to be new energy vehicles by 2025.
Moreover, China’s Ministry of Industry and Information Technology indicated there could be sector consolidation. Tu Le, the founder of Beijing-based advisory firm Sino Auto Insights, said that he expects China’s top electric-car makers to benefit from efforts to consolidate the industry “since it’ll eliminate potential competitors and perhaps allow them to acquire a team or technology to enhance their products.”
As a result, famous Chinese EV makers NIO Inc. (NIO), XPeng Inc. (XPEV), and Li Auto Inc. (LI), which delivered higher-than-expected EV sales in the third quarter, could be solid additions to your watch list.
NIO Inc. (NIO)
Shanghai-based NIO designs, develops, manufactures, and sells smart EVs. Its offerings include five, six, and seven-seater electric SUVs and smart electric sedans. In addition, the company is involved in the provision of energy and service packages to its users and offers power solutions such as Power Home, which is a home charging solution.
On October 1, 2021, NIO announced that it had delivered 10,628 vehicles globally in September 2021, an all-time high monthly record representing a robust growth of 125.7% year-over-year. Moreover, it delivered 24,439 vehicles in the third quarter, representing a 100.2% year-over-year rise. The company exceeded the higher end of its quarterly guidance.
NIO’s total revenues grew 127.2% year-over-year to $1.31 billion for the second quarter ended June 30, 2021. While its adjusted net loss decreased 70.3% year-over-year to $52 million, its loss per share came in at $0.03, down 80.6% year-over-year.
Analysts expect NIO’s EPS to increase 106.2% for the quarter ending December 31, 2021. In addition, the company’s revenue is expected to increase 120.5% year-over-year to $5.63 billion in fiscal 2021. The stock gained 66.9% over the past year to close yesterday’s trading session at $35.99.
XPeng Inc. (XPEV)
Based in Guangzhou, XPEV designs, develops, manufactures, and markets smart EVs in China. It offers SUVs under the G3 name and four-door sports sedans under the P7 name. The company also provides sales contracts, maintenance, supercharging, vehicle leasing, and ride-hailing services.
On September 15, 2021, XPEV launched its third production model, the XPeng P5 smart family sedan, marking a generational leap in smart EV technology, safety, and sophistication for family cars in its class and price range. This could lead to an increase in sales.
XPEV achieved a quarterly record of 25,666 deliveries in the fiscal third quarter, representing a 48% quarter-over-quarter increase and a 199% year-over-year rise. The company’s total revenues grew 536.7% year-over-year to $582.50 million for the second quarter ended June 30, 2021. Also, its loss per share came in at $0.21, down 67.4% year-over-year.
XPEV’s EPS is expected to increase 42.3% in fiscal 2022. In addition, the company’s revenue is expected to increase 213.9% year-over-year to $2.85 billion in fiscal 2021. The stock has soared 89.8% over the past year to close yesterday’s trading session at $38.26.
Li Auto Inc. (LI)
Beijing-based LI designs, develops, manufactures, and sells smart electric sport utility vehicles in China. It offers Li ONE, a six-seat electric SUV equipped with a range of extension systems and smart vehicle solutions.
On October 1, 2021, LI announced that the company delivered 7,094 Li ONEs in September 2021, up 102.5% year-over-year. Its deliveries for the third quarter were 25,116, up 190% year-over-year.
For the second quarter ended June 30, 2021, LI’s total revenues grew 158.8% year-over-year to $780.40 million. The company’s non-GAAP net loss decreased 59.1% year-over-year to $10.10 million. Also, its free cash flow came in at $152.10 million, up 226.5% year-over-year.
For fiscal 2022, analysts expect LI’s EPS to increase 180% year-over-year to $0.08. In addition, the company’s revenue is expected to increase 154.2% year-over-year to $3.71 billion in fiscal 2021. The stock gained 62% over the past year to close yesterday’s trading session at $28.78.
NIO shares closed at $35.83 on Friday, down $-0.16 (-0.44%). Year-to-date, NIO has declined -26.49%, versus a 18.26% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal’s fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.
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