One of the top EV plays, XPeng (NYSE:XPEV) stock is making major moves.
Chinese EV players have enjoyed strong momentum over the last month.
As we come to the end of the chip shortage, we also see the reversing effects of the sell-off, and XPEV stock has surged by more than 30% over the last month.
I have always been bullish on EV stocks and XPeng is my top pick. If you had purchased the stock based on my March 26 recommendation at $32, you could be sitting on 31% gains.
XPEV stock is currently trading at nearly $44, up about 98% over the past year.
XPEV stock hit an all-time high of $74 in November 2020 and fell to $26 in March 2021. It slowly gained momentum but saw another dip to $24 in May and has been soaring since then.
Positive Q1 results and impressive delivery numbers have taken the stock higher.
I am hopeful of strong delivery numbers for June but before the company announces them, let’s dive deep into the investment case for XPEV stock.
Strong Outlook for XPEV Stock
XPeng has provided a strong outlook that has given confidence to the investors. It is a sign that the semiconductor shortage is nearly over.
The company expects total deliveries to be around 16,000 vehicles in the quarter.
It has already delivered 5,147 vehicles in April and 5,696 vehicles in May, which takes the total vehicle deliveries for the 2 months to 10,843 vehicles.
To meet the estimated delivery numbers for the quarter, the company will have to deliver between 4,657 to 5,157 vehicles for June.
The company is also eyeing expansion of the dealership network and charging stations. It aims to reach 110 cities with its network by the end of this year.
Considering the growing demand for EVs, XPeng has the capacity to meet the delivery numbers this quarter. If the company exceeds the deliveries this month, XPEV stock will peak.
Hong Kong Listing
The company is planning an offering of 85 million shares that will be divided between 80.75 million shares for international offering and 4.25 million shares for Hong Kong offering. XPeng has been eyeing a Hong Kong listing for a long time.
The global offering will be underwritten by eight banks and the proceeds will be invested in the Xpilot software and Xmart operating systems.
An investment in the software will boost the development of new models and offer better hardware. It will also help expand the number of charging stations and stores in China.
XPEV’s future looks attractive with its potential to increase production and delivery numbers. As it debuts on the Hong Kong stock market, it will be interesting to see how investors react to the stock.
The largest EV market in the world, China is the major market for XPeng and a listing on the Hong Kong stock exchange is a great way to boost the product offerings and invest in the business.
The Bottom Line on XPEV stock
All in all, XPEV stock is a great EV play. With the Hong Kong listing, the EV maker’s position in the industry will strengthen and it will be an opportunity for investors to enjoy massive gains.
Considering all the factors, XPeng looks well positioned in the industry and it is gaining momentum with dealership network and is rapidly growing the manufacturing capacity with support from Chinese Government.
Slowly but steadily, XPEV stock is moving higher and very well may cross $50. The company is now justifying its valuation and is worth every penny.
The June delivery numbers will say a lot about the performance of the company and its prospects. As XPengs takes large strides towards expanding the market share with its EVs, load up on XPEV stock.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
