Mona SUVs, robot production as key in FY26

Xpeng Inc. (XPEV US/9868 HK) Mona SUVs, robot production as key in FY26 Maintain BUY.Xpeng’s 4Q25 net profit beat on R&D service income.We projectits sales volume in 2H26E to double HoH despite a weak 1Q26,fuelled byaggressive export plans and 4 new models. We also believe that its massproduction of humanoid robots this year could be a positive catalyst for shares. 4Q25 net profit beat onR&D services.Xpeng’s 4Q25 revenue rose 38%YoY to all-time high ofRMB22.3bn, or 5% higher than our prior forecast,mainly due to higher-than-expected technical R&D serviceincomefrom VWand carbon credit trading.Vehicle ASP in 4Q25 was largely in line, whilevehicle GPM of 13.0% was 1.3ppts lower than our projection.SG&A andR&D expenses were both slightly higher than our estimates, while high-margin R&D services led toanall-time high GPM of 21.3%, the narrowestoperating loss in history and a first-time-ever net profit of RMB383mn in4Q25. China Auto New models, exports to fuel sales growth.Although Xpeng’s 1Q26E salesoutlook was lower than ourpriorforecast, which could lead to a net loss againon our estimates, the automaker’sFY26Eexport target (doubled YoYto90,000units with a doubled number of showrooms)exceeded ourexpectation. Welower our FY26E sales volume forecast by 7% to 0.54mnunits followingtheweak 1Q26.We expect 2H26E sales volume to almostdouble HoH, aided by exports and4new models, especially two new MonaSUVs. Our forecast implies 17% YoY growthin its domestic sales volume. Humanoid robot could be a positive catalyst in 2H26.Xpeng targets toproduce 2,000Ironrobots by the end of this year, based on oursupply chainchannel checks. Xpeng also targets an annual sales volume of 1mn units forhumanoid robotsby2030, which could double its revenue. We have notfactored in any income from robots in our FY26E forecast and only little forFY27E,but we believe Xpeng’s current exposure to robots could lift itsvaluation. Earnings/Valuation.We project Xpeng’s FY26E revenue to rise 23% YoYwith a GPM of 18.5%.We revise our FY26E operating loss forecast fromRMB253mn to RMB1.27bn amid lowered salesvolume outlook and higherR&D expenses. Accordingly, we cut our FY26-27E non-GAAP net profitestimates by 59% and 37% to RMB0.9bn and RMB2.3bn, respectively,adjusted for share-based payment and non-cash tax benefit. We maintainourBUYratingbutcutourADR/H-sharetargetpricesfromUS$29.00/HK$113.00 to US$24.00/HK$94.00, based on 1.7x (prior 1.8x) ourFY26E P/S to reflect our earnings cuts. Key risks include lower sales/GPMthan we expect, slower monetization for robots and robotaxis, as well as asector de-rating. Disclosures& Disclaimers Analyst CertificationThe research analyst who is primary responsible for the content of this research report, in whole or in part, certifies thatwith respect to the securities or issuer thatthe analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or tradedin the stock(s) covered in this research report within 30 calendar days prior to the date of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3)serve as an officer of any of the HongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies coveredin this report. CMBIGM RatingsBUY : Stock with potential return of over 15% over next12 monthsHOLD: Stock with potential return of +15% to-10% over next 12 monthsSELL: Stock with potential loss of over 10% over next 12 monthsNOT RATED: Stock is not rated byCMBIGM :Industry expected to outperform therelevant broad market benchmark over next 12 months:Industry expected to perform in-line with the relevant broad market benchmark over next 12 months:Industry expected to underperform the relevant broad market benchmark over next 12 monthsCMB InternationalGlobal MarketsLimited Address: 45/F, Champion Tower, 3 Garden Road, Hong Kong, Tel: (852) 3900 0888 Fax: (852) 3900 0800CMB InternationalGlobal MarketsLimited (“CMBIGM”) is a whollyowned subsidiary of CMB International Capital Corporation Limited (a wholly ownedsubsidiary of China Merchants Bank) Important DisclosuresThere are risks involved in transacting in any securities. The information contained in this report may not be suitable for the purposes of all investors.CMBIGM does not provide individually tailored investment advice. This report has been prepared without regard to the individual investment objectives, financial positionor special requirements. Past performance