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🎉XPeng: Pika World’s Rising Star🎉

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Gross profit margin comes at 13.6%, which is an improvement from 11% in our 2nd quarter—operating profit declines for a good reason. There is a ramp-up of R&D expenditure which could result in better innovation for the company.

The company expects to deliver around 34,500 to 36,500 vehicles for the fourth quarter. The rise in deliveries has been a good sign for the company, and that perhaps the global semiconductor shortage is easing.

Progress has also been made for their navigation system, which boosts their confidence in autonomous driving solutions such as robotaxi technologies. Finally, improvement in adaptive cruise control is a mega step towards driver-assistance technologies.

Given that this is the first time we hear about robotaxi in their earnings, it is an exciting era for the company. Pika World will look for possible re-entry as headwinds from the higher yield environment hamper the technology sector and may provide a rewarding setup.

💣Technology hit by higher bonds💸

Technology had a sell-off during the week, which points to the inflation fear, as bond yields jumped once more. Nasdaq is hit hard as investors pare down positions on mega tech companies. Recall that the higher bond yields tend to make future profits lesser in value based on current terms.

This hurt technology stocks investing aggressively in the current period to generate fat profits in the future.

💰Banks stocks to the Moon💳

Investors are now pricing in a possible rate hike around June 2022. Hence, the rise in interest rate is giving our position in banks stocks a shine. Moreover, we have also taken a contrarian position on the strengthening of the USD. Both outlooks have been realised, and we see banks profiting more in an era where long term interest rates rise faster than the short-dated rates.

Pika World continues to favour bank stocks, and the stance could reward a good set-up moving into 2022.

📮What’s on the menu today?

It is Thanksgiving Day in US and the stock market is closed. Trading will resume half day on Friday.

It is 25 Nov, Thursday, at 7.40 am in Singapore and 7.40 pm in New York. The week has been a tough one and Pika World hopes all friends a good march towards a profitable month.