Li Auto (LI) joined Xpeng Motors (XPEV) in reporting mixed third-quarter results and bullish guidance, but the huge rally in China electric car stocks decelerated sharply after short seller Citron Research targeted Nio (NIO).
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Li Auto Earnings
Estimates: Loss of 4 cents per share on revenue of $342 million.
Results: Early Friday, Li Auto lost 8 cents a share on revenue of $369.8 million. Revenue rose 29% vs. the prior quarter. As previously disclosed, Q3 vehicle deliveries increased 31% to 8,660 vehicles sequentially. Gross margin expanded to 19.8% from 13.3% in Q2.
Outlook: Li Auto forecast Q4 deliveries between 11,000 and 12,000 units, which would be an increase of 27%-38.6% from Q3. It expects total revenues to be between $457.8 million-$499.4 million, representing an increase of 23.9%-35.1% from Q3.
Stock: Shares pared gains sharply to trade up 6% at 33.78 on the stock market today after surging more than 20% earlier. Li Auto scored a $1 billion U.S. IPO in July, pricing at 11.50. The company announced a massive recall of its Li One electric SUVs recently.
Nio, which reports Nov. 17, turned 4% lower, after Citron pulled its earlier bullish call on the stock and set a price target of 25.
“It is time for investors to rotate out of NIO, enjoy your profits and look for the next disruptive technology,” the short seller said.
Xpeng Earnings
Estimates: Analysts expected a loss of 18 cents per ADS on revenue of $284.6 million.
Results: On Thursday, Xpeng lost an adjusted 32 cents per ADS. Revenue came in at $293.1 million, up 342.5% in local currency terms.
Gross margin was 4.6% vs. -10.1% a year earlier.
Vehicle deliveries, already reported, hit 8,578 in the September-ending quarter, up 266% vs. a year earlier and 166% vs. Q2 2020. Deliveries of the P7 sedan, a rival to the made-in China Tesla Model 3, jumped to 6,210 vs. 325 in Q2. P7 deliveries began at the very end of Q2.
Outlook: Xpeng sees Q4 deliveries of 10,000 electric vehicles, up 211% vs. a year earlier. Revenue should hit 2.2 billion renminbi, equal to about $332 million. The China EV IPO already said October deliveries hit 3,040, including 2,104 P7s.
Stock: Shares gave up most gains to edge up 0.6% to 45.00 Friday after closing up 33% at 44.73 the prior session. Xpeng stock surged past a 23.20 early entry and a 25.10 official buy point last week amid booming Chinese EV sales. Xpeng stock priced at 15 in a bumper $1.5 billion IPO in August.
On Wednesday, Bank of America backed a buy rating on Xpeng stock while hiking its price target to 36.20. It cited a robust EV pipeline that should boost top-line growth.
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Among other electric car stocks, Tesla fell 2% Friday. China’s Kandi Technologies (KNDI), which reported mixed results Monday, added 5.6%, also coming well off intraday highs.
Hyliion Holdings (HYLN), which focuses on electric vehicles for commercial transport, also reported earnings for the first time since it emerged in October after a blank-check merger. Early Thursday, Hyliion disclosed it lost 76 cents per diluted share for the nine months ended September, vs. a loss of 45 cents a share in the year-ago period. It had $7.6 million in cash and equivalents as of September. Shares shed 3% after ending flat Thursday.
Find Aparna Narayanan on Twitter at @IBD_ANarayanan.
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