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A $57 Price Target Could Be Just the Beginning for Xpeng

Let’s be honest. Not every investor loves Chinese companies and stocks right now. Perhaps some investors saw what happened to ride-hailing giant Didi…



This article was originally published by Investor Place

Let’s be honest. Not every investor loves Chinese companies and stocks right now. Perhaps some investors saw what happened to ride-hailing giant Didi Global (NYSE:DIDI). As a result, maybe they’re afraid to take a position in China-based electric vehicle (EV) maker Xpeng (NYSE:XPEV) because XPEV stock might also tank.

Source: Johnnie Rik /

Yet let’s not make generalizations. Granted, the Chinese government has been cracking down on some companies, mainly due to cybersecurity and antitrust concerns.

But not every China-based company is in trouble. Moreover, XPEV stock won’t necessarily meet the same fate as Didi and other Chinese stocks.

Indeed, recently issued statistics indicate that Xpeng is firing on all cylinders. Besides, one prominent analyst is bracing for its shares to climb, and his bullish argument is convincing.

A Closer Look at XPEV Stock

The shares did have their time in the sun, back in November 2020. At that time, the share price rocketed from $20 to a peak of $74.49.

Unfortunately, folks who chased the stock in the mid-$70’s were soon punished for their haste. As it turned out, a nasty crash ensued in late 2020 and persisted throughout the first few months of 2021.

Since the summer, XPEV stock has been rangebound and can’t seem to break above $45. There’s an old saying, though: the longer the base, the higher in space. In other words, prolonged sideways periods can sometimes be the launch pad for a major breakout.

So don’t be discouraged by the lateral movement of XPEV stock. A big move could be just around the corner – and it would be a shame if you don’t have a position in the stock when it happens.

No One Can Argue With These Results

Stocks will always have their doubters and naysayers, especially when it comes to Chinese companies nowadays. However, the skeptics would be hard-pressed to argue with the numbers included in Xpeng’s recently published vehicle delivery update.

Seriously, the company just killed it across the board. For one thing, Xpeng posted 10,412 deliveries in September, marking the company’s highest-ever monthly delivery figure.

Along with passing the 10,000 milestone, that number also represents a 199% year-over-year surge and a 44% increase over the previous month.

Do you need more ammo that supports the bull thesis? Here you go: for Q3, Xpeng achieved a quarterly record of 25,666 deliveries. That amounted to a 48% increase versus Q2, as well as a 199% YOY improvement.

But wait; it gets even better when we extend the timeline. In the first nine months of the year, Xpeng delivered a total of 56,404 vehicles, which represents a whopping YOY increase of 300%.

Bear in mind, this occurred during a semiconductor shortage, as well as the Chinese government’s crackdown on multiple industries.

Yu Said It

Even with those delivery stats in mind, some folks will still be nervous about Xpeng because Chinese stocks have taken a beating this year. To help assuage their fears, I’ll refer the skeptics to Deutsche Bank’s Edison Yu.

While acknowledging that there have been several reasons for the underperformance of Chinese stocks, Yu asserts that the “largest overhang” has been investors’ reluctance to commit to the nation’s equities following the Chinese authorities’ crackdown on Didi.

I tend to concur with Yu’s reasoning. Looking ahead, Yu believes that “sentiment {towards Chinese EV stocks)  could be bottoming going into year-end.” That, of course, should be beneficial to Xpeng and its shareholders.

Furthermore, for Q4, Yu believes that Xpeng’s delivery guidance in the 35,000 to 40,000 range, and he predicts that the company will deliver 15,000 vehicles in December.

Those estimates are realistic, and would bring Xpeng’s full-year volume to almost 94,000 deliveries, representing a 247% YOY increase. Yu raised his price target on XPEV stock from $51 to an even more ambitious $57.

The Bottom Line

I like the sound of $57, but long-term investors can aim even higher than that if they truly believe in the company. And why wouldn’t they? Just look at those delivery numbers and the surges in the automaker’s deliveries.

They’re outstanding and suggest that XPEV stock deserves to be much higher.

So if you own the stock, just be patient and be prepared for a spectacular ending to Xpeng’s  record-breaking year.

On the date of publication, David Moadel 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 Publishing Guidelines.

The post A $57 Price Target Could Be Just the Beginning for Xpeng appeared first on InvestorPlace.

Author: David Moadel

Energy & Critical Metals

Flexible fuel gas turbines meet airports’ power needs for today and tomorrow

Despite the financial and operational challenges brought to bear by the global pandemic, the Aviation industry reaffirmed their global commitment to Net…

Despite the financial and operational challenges brought to bear by the global pandemic, the aviation industry reaffirmed their global commitment to Net Zero at COP26 Transport Day.

By Martino Bosatra, Board Member and Managing Director at SEA Energia

Martino Bosatra, Board Member and Managing Director at SEA Energia

One of the areas that attention is being focused on is the aviation industry. As hubs of the sector, airports are under increasing pressure to reduce their operations’ carbon footprint.

Within Europe, the European Green Deal sets the objective of making Europe the first climate-neutral continent by 2050: a commitment that places a particular responsibility on the aviation sector.

In response to the European Green Deal, the aviation industry has brought forward this date, ensuring that by 2030 European airports will have a zero-carbon footprint.

Emissions from airports fall under scope 1, 2 and 3 accounting as defined by the GHG Protocol.

Scope 1 is emissions from airport-owned or controlled sources, such as airport-owned power plants that burn fossil fuel and conventional vehicles or ground support equipment that uses fossil fuels.

Scope 2 covers indirect emissions from the use of purchased energy for electricity and heat.

In contrast, scope 3 covers indirect emissions that the airport does not control but can influence, such as tenant emissions, on-airport aircraft emissions and emissions from passenger vehicles arriving at or departing the airport.

The EU Commission’s more recent Sustainable and Smart Mobility Strategy reiterates the urgency of transitioning to zero-emission airports, whereby the best practices followed by the most sustainable airports must become the new normal and enable more sustainable forms of connectivity.

Milan leading the way to reducing emissions

Between them, Milan’s two biggest airports, Malpensa (MXP) and Linate (LIN), handle 33 million passengers a year during regular times. Malpensa is one of the most important airports in Europe, offering 3,500 direct flights each week and numerous intercontinental and long-haul destinations for a total of 200 destinations.

Keeping these airports running efficiently requires reliable power. SEA Energia (Società Esercizi Aeroportuali) is responsible for the electricity, heating, and cooling of these two airports. The company needed to revamp its existing power plant at Milano Malpensa Airport to meet stricter environmental legislation and ensure a reliable supply of power, heating, and cooling. The path they took was to replace an existing aero-derivative turbine with a Siemens Energy gas turbine of type SGT-700.

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SEA Energia operates on an exclusive basis for a single major customer, producing electrical, heating, and cooling energy. The company’s strategic vision focuses on the sustainable generation of value across its three main components: economic, environmental, and social. Its operations at the two airports aim to save resources, reduce air, soil, and water pollution, and constantly monitor activities to ensure maximum system efficiency.

Part of the concept includes upgrading the existing power plant at Milano Malpensa by replacing one of two existing aero-derivative turbines, an ageing Rolls Royce RB211, with one new SGT-700. This gas turbine is an ideal fit for power generation and mechanical drive applications.

With the high exhaust heat, it is also excellent for cogeneration and combined cycle applications. The SGT-700 employs an 11-stage axial-flow transonic compressor incorporating the latest aerodynamics, with variable guide vanes for robust operability and optimized performance over a wide range of operating conditions.

The two-stage uncooled free power turbine offers a nominal shaft speed of up to 6,500 rpm. For mechanical drive, it may run at 50% to 105% of the nominal rate. The power turbine can be matched for optimal performance at different ambient conditions. The installation of the new gas turbine will help SEA Energia enhance its plant performance both from an efficiency and an environmental perspective.

Siemens Energy preserved much of the existing plant and allowed power generation continuity on the second RB211 turbine that was to remain in place. As the airport continued to operate, it was essential to avoid any disruptions to the power plant’s regular operation.

Overcoming a triumvirate of challenges

To ensure the successful delivery of the project, three significant challenges had to be overcome. The first was to ensure that there was no interruption or disruption to the operation of the power plant. To achieve this required Siemens Energy to install the new turbine into the system without jeopardizing the plant’s regular operation.

Then came the actual logistics. This was the first SGT-700 delivered by air freight instead of traditional sea routing. This involved some tricky discussions with the air freight company regarding fitting the turbine inside the Antonov transport plane.

Finally, there were the challenges presented by COVID-19. The pandemic struck the world early in 2020, and the effects are continuing to disrupt operations. This had a significant impact on the supply chain for manufacturing the turbine. Several suppliers closed their premises or reduced capacity due to pandemic working practices.

It took a considerable effort from the purchasing department to ensure that the schedule was kept on track. Further complications arose because of the lack of face-to-face meetings with stakeholders and EHS organizations on the site during the progress of the project. A worldwide footprint limited the possible negative impacts, and delivery of the new SGT-700 package was achieved on schedule.

A smooth commissioning process

The project kicked off at Malpensa in June 2020 when the Siemens Energy team arrived on-site to begin site preparation. The old turbine was removed and shipped back to the RB211 refurbishment site in the UK.

The requirement that this is achieved whilst not disrupting the plant’s performance presented some challenges, particularly with the narrow spaces in the area due to the presence of existing equipment.

This was particularly problematic when it came to the lifting operations: with the existing package weighing over 150 tonnes and measuring 14 meters in length, this required careful coordination. The current air intake, ventilation intake and local electrical room had to be preserved and adapted for the new turbine.

Once the old turbine had been removed, the foundations were checked and repaired, and the gas turbine and associated generator were delivered to the site in November. Once the turbine was in place, installation could begin.

Firstly, it was connected to the existing system, both mechanically and electrically, before checking the instrumentation and the interface with the control system. Then came commissioning, which involves confirming that the reinstalled system could communicate with the existing plant. With this checked, the machine could be connected to the power grid with gas fed to the turbine for the first firing. In this process, the machine is fired up and allowed to rotate while connected.

If that is successful, the next step is to connect the machine and synchronize it to the grid. Once it has passed these steps, the circuit breakers are closed, and power can be fed to the grid.

Benefits for today and tomorrow

“The journey started more than three years ago with a challenging permit process, which is now completed,” said Martino Bosatra, CEO of Sea Energia. “During this journey, a strong relationship has been built between Sea Energia and Siemens Energy.

This relationship has created, for both partners, a lot of value, especially in terms of learning and collaboration but also in identifying potential solutions which might help SEA to reach its own target in carbon footprint reduction.”

Once the plant is up and running in June, SEA Energia will enjoy three significant benefits: lower emissions, higher efficiency, and greater reliability. It will allow SEA Energia to comply with the ever more restrictive regulations on emission limits set by the Italian Region of Lombardy for power plants. The SGT-700 will significantly decrease the site’s emissions while meeting all the airport’s requirements for power, heat and cooling.

The Siemens Energy SGT-700 gas turbine. Image: Siemens Energy

The contract guarantees compliance with the emission limits for environmental pollutants, especially NOx, CO and PM. With the SGT-700 optimizing the output, higher energy efficiency can be achieved. The turbine will also improve reliability to the customer with its proven track record of hundreds of thousands of working hours worldwide.

For SEA Energia, the prime focus was on improving the airport’s day-to-day operation, but above and beyond that, there are further possibilities down the road. One opportunity could be to partake in the grid capacity markets that allow generators to sell any extra capacity back to the power grid. Although market conditions do not make that a priority at present, it is an option for the future.

Secondly, and more relevant over the long term, is the turbine’s flexibility towards fuel. While natural gas is the preferred option, there is a growing movement towards utilizing hydrogen for power generation. With technology now available to generate green hydrogen, hydrogen produced using only renewable energy – a technology that Siemens has developed with its Silyzer electrolysers – the path is open to making the power plant’s environmental footprint even smaller.

Siemens Energy is already running the turbines with a mix of gas and hydrogen and guarantees that by 2030 all SE gas turbines will run entirely on hydrogen.

This is a significant assertion for operators, reassuring them that their investment will continue to be futureproof whatever the future path of the energy transition.

The post Flexible fuel gas turbines meet airports’ power needs for today and tomorrow appeared first on Power Engineering International.

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Energy & Critical Metals

Galan’s HWM project value jumps 120pc after update on lithium prices

Special Report: Galan Lithium has updated the Preliminary Economic Assessment (PEA) study for its flagship Hombre Muerto West (HWM) Project … Read More

Galan Lithium has updated the Preliminary Economic Assessment (PEA) study for its flagship Hombre Muerto West (HWM) Project in Catamarca Province, Argentina, based on a revised lithium price.

The original PEA was based on an average lithium price of US$11,687/tonne to the year 2040, with the updated study using the long-term average real lithium price assumption (2025-2040) of US$18,594/tonne battery grade lithium carbonate (LCE).

The unleveraged pre-tax net present value (NPV) has increased to US$2.2 billion – a 120% increase from US$1 billion in 2020.

The internal rate of return (IRR) is 37.5%, the project has less than a three-year payback period and the average life-of-mine annual EBITDA is US$287 million, up from US$174 million.

The company now has two PEA study level projects – HMW and Candelas – which have a combined long term production potential of 34ktpa LCE and a combined pre-tax NPV of US$3.4 billion.

‘Phenomenal’ NPV on conservative price assumption

The updated economic study retains the original production profile of a long-life 40 years+ project at 20,000 tonnes per annum of battery grade LCE, including competitive cash production cost for Li2CO3 of US$3,518/tonne in the first quartile of global lithium cost production curve.

Galan Lithium (ASX:GLN) managing director Juan Pablo Vargas de la Vega said the updated project economics for HMW show how healthy the project is.

“Despite using a conservative long-term price assumption, HMW has delivered a phenomenal pre-tax NPV of nearly US$2.2 billion,” he said.

“The company is in an enviable space whereby it has two study level projects that can potentially deliver combined long term production levels of 34ktpa LCE along with NPVs that are above US$3.4 billion.

“As we have previously said, Galan remains excited about the potential value add for our shareholders once we enter the lithium market with prices expected to be +US25k/tonne LCE.

“Our projects would now be among the lowest cost of any future producers in the lithium industry, due to their high grade and low impurity setting, green credentials and a low carbon footprint.

“Galan is excited to be a part of the solution to the global decarbonisation story.” 

Long term estimate of the contracted price of battery grade Li2CO3 developed by Roskill

DFS planned in 2022

Since the release of the original HMW PEA Study in 2020, the company has confirmed laboratory lithium chloride concentrations of 6% lithium several times and confirmed production of lithium carbonate battery grade of 99.88% LCE from its concentrate.

It has also received permits for new drilling and Stage 1 construction permits for the HMW camp and pilot plant.

During 2022, Galan will be undertaking a definitive feasibility level study (DFS) with the appointment of an independent, well credentialed engineering firm imminent.

The company also expects the new HMW drilling to increase its indicated resources as well as a likely move into the measured and indicated mineral resource category.




This article was developed in collaboration with Galan Lithium Limited, a Stockhead advertiser at the time of publishing.


This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post Galan’s HWM project value jumps 120pc after update on lithium prices appeared first on Stockhead.

Author: Special Report

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Energy & Critical Metals

Visualizing the 3 Scopes of Greenhouse Gas Emissions

Here’s a look at the 3 scopes of emissions that comprise a company’s carbon footprint, according to the Greenhouse Gas Protocol. (Sponsored Content)

The following content is sponsored by the Carbon Streaming Corporation.


Types of carbon emissions

The Briefing

  • There are three groups or ‘scopes’ of emissions as defined by the Greenhouse Gas (GHG) Protocol Corporate Standard
  • A company’s supply chain emissions (included in Scope 3) are on average 5.5 times more than its direct operations (Scope 1 and Scope 2)

Visualizing the 3 Scopes of Greenhouse Gas Emissions

Net-zero pledges are becoming a common commitment for nations and corporations striving to meet their climate goals.

However, reaching net-zero requires companies to shrink their carbon footprints, which comprise greenhouse gas (GHG) emissions from various stages in the value chain. As more companies work to decarbonize, it’s important for them to identify and account for these different sources of emissions.

This infographic sponsored by Carbon Streaming Corporation explains the three scopes of GHG emissions and how they make up a company’s carbon footprint.

The 3 Scopes of GHG Emissions

According to the Greenhouse Gas Protocol, there are three groups or ‘scopes’ that categorize the emissions a company creates. The GHG Protocol Corporate Accounting and Reporting Standard, referred to as the GHG Protocol Corporate Standard, provides the most widely accepted standards for reporting and accounting for emissions and is used by businesses, NGOs and governments.

Scope 1 Emissions

These are direct emissions from sources that are owned or controlled by the company. Consequently, they are often the easiest to identify and then reduce or eliminate. Scope 1 emissions include:

  • On-site manufacturing or industrial processes
  • Computers, data centers, and its owned facilities
  • On-site transportation or company vehicles

Scope 2 Emissions

These are indirect emissions from the generation of purchased or acquired energy that the company consumes. Scope 2 emissions physically occur at the site that produces the energy and the emissions depend on both the company’s level of consumption and the means by which the energy was generated (e.g. fossil fuels vs renewable energy). Scope 2 emissions include:

  • Purchased electricity, heating, cooling, and steam

Scope 3 Emissions

Scope 3 includes all other indirect emissions that occur throughout a company’s value chain. These occur from sources not owned or controlled by the company and are typically difficult to control and thereby reduce.

Scope 3 emissions often make up the largest portion of a company’s carbon footprint. According to the CDP, a company’s supply chain emissions (included in Scope 3) are on average 5.5 times more than emissions from its direct operations (Scope 1 and 2). These include emissions from:

  • Employee commuting or business travel
  • Purchased goods and services
  • Use of sold products
  • Transportation and distribution of products

Companies can reduce their Scope 1 and Scope 2 emissions by improving operational efficiency and using renewable energy sources. However, managing and reducing Scope 3 emissions can be difficult depending on the company’s upstream and downstream activities.

For example, controlling the emissions from the extraction of raw materials used in a company’s end-product or from the usage of such product by a customer is not entirely in the company’s hands. But this is where carbon offsets can help.

Offsetting Emissions with Carbon Offsets

One carbon offset, also referred to as a carbon credit, represents one metric ton of GHG emissions that has been avoided, reduced or removed from the atmosphere. By purchasing carbon credits, companies can offset the emissions that are difficult to reduce or eliminate, such as Scope 3 emissions.

In fact, the voluntary carbon markets will surpass $1 billion in annual transaction value for the first time in 2021. As decarbonization plans pick up pace, carbon credits will play an important role in helping companies achieve their climate goals.

Carbon Streaming Corporation is focused on acquiring, managing and growing a high-quality and diversified portfolio of investments in carbon credits.

Where does this data come from?

Source: The Greenhouse Gas Protocol Corporate Standard

The post Visualizing the 3 Scopes of Greenhouse Gas Emissions appeared first on Visual Capitalist.

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