By Jiahui Huang

Chinese automaker XPeng's shares rose sharply in Hong Kong after solid earnings for the first quarter, as strong sales momentum and an upbeat outlook boosted investors' confidence.

Its shares rose 7.2% to 83.10 Hong Kong dollars early Thursday, equivalent to $10.61, outperforming the Hang Seng Index's 0.3% decline.

The gains came after XPeng's first-quarter earnings beat expectations and its net loss narrowed by more than half.

XPeng's management also reaffirmed its confidence on swinging to a profit in the fourth quarter, thanks to sequential margin expansion and robust sales. The positive outlook is mainly driven by the introduction of new and face-lifted models with higher prices, including the new G7 priced around 250,000 yuan, an upgraded P7 model priced around 300,000 yuan and a new full-electric vehicle model, Bernstein analysts wrote in a note.

In the first quarter, XPeng's revenue more than doubled to 15.81 billion yuan, which was mainly driven by robust sales of its competitively priced Mona M03 and P7+, the analysts added.

Bernstein said that they are encouraged by positive sales momentum in the recent quarter and upcoming product launches, but continued strength in sales hinges on whether its higher-priced models will also be well-received by the market.

Looking ahead, XPeng has a solid plan for new models and high-level autonomous driving technology development, which will further increase the company's competitiveness against its rivals, Nomura analysts wrote in a note.

With active business targets for both the near and long term, we expect the company's performance to improve further, the analysts said.

Bernstein maintained its market-perform rating for the stock and raised its target price for ADRs to $19.00 from $18.00, and for H-listed shares to HK$74.00 from HK$70.00. Nomura maintained its buy rating for the stock and target price of $30.00 for its ADRs.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

May 21, 2025 23:45 ET (03:45 GMT)

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