XPeng’s Feb sales largely stayed flat MoM at 30,453 vehicles, continuing sales outperformance over industry peers and beating prior guidance and our forecast. Supported by the end-user demand recovery and the launch of revamped G6, we anticipate March deliveries are likely to rally towards 30k+ units and even a record high, lifting a QoQ increase in 1Q25 sales volume from 91k units in 4Q24. From 2Q25 onwards, the company is poised for accelerated sales momentum with rich pipelines ahead, which mainly contain all-new G7 SUV in April, MONA Max in May, Xiaomi SU7-like sports car in June, plus first EREV model (G01) and MONA SUV in 2H25. This gives a sturdy base for XPeng to pursue a promising and positive growth outlook. To reflect better-than-expected YTD sales and stronger new model pipeline ahead, we nudge up 2025-26E revenue forecasts by 21%-27% to RMB84.7bn/117.3bn. Maintain BUY with higher TP of US$25.00/HK$96.00 by adopting 2x 2025E P/S.
　　Key Factors for Rating
　　Feb deliveries beat prior guidance and our anticipation. In Feb, XPeng’s monthly sales largely stayed flat MoM at 30,453 vehicles against the industry- wide demand pullback during CNY low season, surpassing the company’s prior guidance and our initial forecast on robust deliveries for P7+ sedan and MONA 03 model. Given the on-going end-user demand recovery and the coming release of 2025 revamped G6 model, we expect the overall order flow to continue its strong momentum and March deliveries are likely to see a sequential rally towards 30k+ units and even a record high. Overall, we expect XPeng’s 1Q25 sales volume to moderately increase from 4Q24 at 91k units, constantly outperforming competitors and PV industry.
　　Poised for accelerated growth with stronger new model cycle ahead. XPeng will usher in a stronger new model cycle from March onwards. In 1H25, the company plans to deliver at least one new or facelift model each month, with facelifted G6/G9 model to be released in March, all-new G7 SUV in April, MONA Max in May, Xiaomi SU7-like sports car in June (codenamed E29). In 2H25, the company is set to roll out two all-new models, which possibly contain its first EREV model codenamed G01 and MONA SUV. The robust new model cycle ahead gives a sturdy base for XPeng to pursue a promising and positive growth outlook.
　　Valuation
　　To reflect better-than-expected sales YTD and strong model pipeline ahead, we lift our sales volume forecasts for 2025-26E to 470k/620k units. Accordingly, we nudge up our revenue forecasts by 21%-27% to RMB84.7bn/117.3bn, and raise non-GAAP net income estimates to RMB-1.9bn/993m for 2025-26E, respectively. Maintain BUY with higher TP of US$25.00/HK$96.00 by adopting 2x 2025E P/S. We suggest focusing on the pace of new launches from March onwards, and valuation re-rating headroom from humanoid robots involvement.