Investors are evaluating the merits of two prominent automotive companies: XPENG and Hino Motors. Both firms operate in the auto sector but focus on different markets and technologies. This article analyzes their earnings, risk profile, valuation, dividends, analyst recommendations, institutional ownership, and overall profitability to determine which presents a more attractive investment opportunity.
Ownership Overview
Institutional investors hold 21.1% of XPENG’s shares, while insiders own 27.6%. This strong institutional ownership indicates confidence among major investors regarding XPENG’s potential for long-term growth. In contrast, Hino Motors does not disclose the same level of institutional support, which may impact investor perception.
Earnings and Valuation Insights
A detailed comparison reveals significant differences in revenue and profitability between the two companies. Hino Motors reported a gross revenue of $11.15 billion with a net income of -$1.44 billion, resulting in earnings per share (EPS) of $2.90 and a price-to-earnings (P/E) ratio of 9.57.
XPENG, on the other hand, has a much lower gross revenue of $5.60 million and a net income of -$805.43 million, leading to an EPS of -$0.42 and a P/E ratio of -47.90. Despite its lower revenue, XPENG’s P/E ratio suggests it is currently more affordable compared to Hino Motors, indicating potential value for investors.
Analysts from MarketBeat.com have provided ratings for both companies. Hino Motors currently holds no buy or strong buy ratings, while XPENG enjoys a more favorable outlook, with three buy and four hold ratings, resulting in a consensus price target of $25.34. This suggests a potential upside of 25.96% for XPENG, making it a more attractive option in the eyes of analysts.
Profitability and Risk Assessment
When examining profitability, Hino Motors has a net margin of 1.56%, a return on equity of -4.31%, and a return on assets of -0.78%. Conversely, XPENG shows negative margins, with a net margin of -4.02%, a return on equity of -9.25%, and a return on assets of -3.12%. These figures highlight the challenges XPENG faces in achieving profitability compared to Hino Motors.
Risk is another critical factor. Hino Motors has a beta of -0.23, indicating that its stock price is significantly less volatile than the S&P 500. In contrast, XPENG has a beta of 1.13, making it more susceptible to market fluctuations. This higher volatility may appeal to risk-seeking investors but could deter those looking for stability.
Company Profiles
Hino Motors, founded in 1910 and headquartered in Hino, Japan, specializes in manufacturing large commercial vehicles. As a subsidiary of Toyota Motor Corporation, Hino produces trucks, buses, and light commercial vehicles, along with various service parts and engines.
XPENG, established in 2015 and based in Guangzhou, China, focuses on smart electric vehicles (EVs). The company offers a range of products, including SUVs and sedans, and provides services like auto financing and ride-hailing. XPENG also invests heavily in technology, including advanced driver-assistance systems and in-car operating systems.
In summary, while XPENG excels in analyst ratings and potential growth, it faces significant challenges in profitability and volatility. Hino Motors, with its established history and stability, presents a different investment dynamic. Investors must weigh these factors carefully when deciding between the two companies.
