What Nio’s Q1 Results Mean For Its Stock

China Electric Vehicles Development

SHANGHAI, CHINA – APRIL 26, 2021 – A gross sales store for electric automobile designate Nio interior a shopping mall in … [+] downtown Shanghai, China, April 26, 2021. (Photograph credit could maybe well simply light read Costfoto/Barcroft Media through Getty Images)


Barcroft Media through Getty Images

Nio (NYSE: NIO) published a stronger-than-anticipated blueprint of Q1 2021 outcomes, beating market expectations on both earnings growth and adjusted earnings, driven by surging luxury electric automobile gross sales and rising margins. Nio delivered a total of 20,060 autos over the quarter, marking an invent higher of 423% year-over-year, serving to revenues upward thrust 482% to around RMB 8.0 billion ($1.24 billion). Unpleasant earnings margins had been particularly strong, coming in at 19.5%, up from detrimental 12% a year previously, indicating that the company is getting greater and more efficient at producing its autos. For standpoint, the broader world auto industry sees defective margins of below 10%.

Even supposing Nio had a reasonably strong Q1, the shut to-interval of time outlook looks muted. While Nio says that it continues to take a look at strong quiz, it is facing production elements due to the the realm semiconductor shortage, which has be troubled the auto industry particularly badly. Nio says that deliveries for Q2 are projected to face at between 21,000 and 22,000 autos, marking a sequential growth of apt about 10% on the greater extinguish. The shortfall in semiconductor supply is being attributable to surging quiz from the client electronics industry, some production-associated elements, and the novel trade tensions between the U.S. and China. The auto industry, which on the final former chips produced using older chip fabrication applied sciences (40nm and 55nm nodes, to illustrate), has been particularly badly impacted as semiconductor fabs bag transitioned to producing more moderen and greater-designate chips for top rate client electronics. Now Nio stock is priced for tough growth, Trading at about 10x 2021 forward earnings, and if the supply crunch in the semiconductor market persists thru this year, keeping succor birth growth, investors will possible re-rate the valuation of the stock lower.

While automakers and client electronics avid gamers were hit by the semiconductor supply crunch, there are a selection of corporations which could maybe presumably be cashing in on the subject. Explore our theme on Shares That Reduction From The Semiconductor Shortage for more details.

[4/19/2021] What’s Occurring With Chinese EV Shares?

Chinese electric automobile stocks had a reasonably great week, with Nio (NYSE: NIO) declining by about 5%, Xpeng (NYSE: XPEV) declining by about 11%, and Li Auto stock falling by about 15% over the final 5 Trading days. Compared, the S&P 500 won nearly 1.5% over the final week. The three stocks are furthermore down by between 30% to 40% year-to-date. So what’s riding the novel promote-off? At first, investors are possible concerned that the realm semiconductor shortage which is weighing in the auto industry could maybe well presumably an increasing selection of more impact Chinese EV avid gamers. Secondly, competition in the Chinese EV blueprint is furthermore mounting with dapper Chinese automakers, world auto majors, and upstarts making a wager massive on electric autos in China. Shall we reveal, China’s largest carmaker, Geely, is launching a top rate electric automobile designate of its cling. Ford furthermore lately started taking orders for its all-electric Mustang Mach-E crossover automobile in China. Even client electronics behemoth Xiaomi plans to make investments about $10 billion in developing EVs. With the Shanghai Motor Existing slated to originate up on April 21, we’re susceptible to take a look at plenty of novel EVs making their debuts in China. Even supposing the EV market in China is massive with around 1.3 million autos equipped in 2020 and gross sales projected to grow by over 50% this year [1], greater competition will build rigidity on the likes of Nio, Xpeng, and Li Auto.

Explore our diagnosis on Nio, Xpeng & Li Auto: How Produce Chinese EV Shares Compare? for an outline of the monetary and valuation metrics of three main Chinese EV avid gamers.

[3/29/2021] Why Appreciate Chinese EV Shares Declined This one year?

U.S. listed Chinese electric automobile stocks bag declined considerably this year. Nio (NYSE: NIO) and Xpeng (NYSE: XPEV) are down by about 25% year-to-date, whereas Li Auto is down by shut to 20%. Compared, the broader NASDAQ index is up by 2% year-to-date. So what’s riding the decline? While high growth stocks, on the final, were impacted due to rising hobby rates, Chinese EV avid gamers are furthermore being be troubled by a pair of totally different elements. At first, competition is mounting. Shall we reveal, Tesla (NASDAQ: TSLA) lately started selling a in the community made model of its Model Y, whereas China’s largest carmaker, Geely, is launching a top rate electric automobile designate of its cling. Secondly, the realm chip shortage has started to hit Chinese EV majors. Nio will quick droop the auto production job at its manufacturing plant in Hefei for five working days initiating from March 29 due to a lack of chips, and it’s possible that totally different avid gamers will furthermore be impacted. Thirdly, U.S.-listed Chinese stocks are being weighed down by issues that they would maybe well presumably be de-listed from American exchanges, with the SEC initiating to study about the monetary audits of foreign corporations.

Total, itemizing associated issues aside, we assume that Chinese EV stocks survey love reasonably correct bets at recent ranges. The EV market in China is massive, with deliveries in 2020 standing at about 1.3 million objects and gross sales projected to grow by over 50% this year. [1] Homegrown brands equivalent to Nio, Li Auto, and Xpeng are greater positioned to earnings, given their deeper files of the native markets, favorable legislation, and irregular innovations focused at Chinese patrons. While these corporations trade at high multiples, they’ve growth on their aspect, with all three corporations now heading in the accurate route to on the very least double earnings this year. Explore our diagnosis on Nio, Xpeng & Li Auto: How Produce Chinese EV Shares Compare? for an outline of the monetary and valuation metrics of three main Chinese EV avid gamers.

[3/19/2021] Nio Inventory A Take care of shut?

Nio stock (NYSE: NIO) is down by nearly 25% over the final month, Trading at ranges of around $42 per share. The stock is furthermore down by about 34% from its all-time highs. So what’s riding the correction? At first, there was a broader promote-off in high-growth stocks due to rising hobby rates. Secondly, competition in the sumptuous electric SUV blueprint in China is rising, with Tesla (NASDAQ: TSLA) commencing deliveries of a in the community made model of its Model Y. One at a time, the realm shortage of semiconductors has furthermore be troubled automobile corporations and investors are possible concerned that Nio will most definitely be impacted.

That said, we assume Nio stock looks love a reasonably correct designate for the time being. Even supposing the stock light trades at a seemingly steep 12x projected 2021 revenues, Nio is rising very hasty. Sales are projected to more than double this year and to grow by nearly 65% in 2022, per consensus estimates. We assume the company could maybe well simply light continue to fare neatly no matter rising competition. The EV market in China is massive, with gross sales in 2020 standing at about 1.3 million objects and gross sales are projected to grow by over 50% this year. [1] Nio can bag an edge in China, being a homegrown designate that affords irregular innovations equivalent to battery-as-a-carrier.

Explore our diagnosis on Nio, Xpeng & Li Auto: How Produce Chinese EV Shares Compare? for an outline of the monetary and valuation metrics of three main Chinese EV avid gamers.

[3/2/2021] Nio Inventory Updates

Chinese luxury electric automobile maker Nio published a combined blueprint of Q4 2020 outcomes on Monday. While the company’s loss per American Depositary Half was wider than anticipated at about -$0.14, revenues came in a little bit of sooner than expectations rising 46.7% sequentially to about $1.02 billion, driven by stronger deliveries of the ES8, ES6, and EC6 autos. Nio’s stock was down by about 5% in pre-market Trading on Tuesday, possible due to the the company’s lighter-than-anticipated guidance.

Nio expects to suppose between 20,000 and 20,500 autos in Q1 2021, marking an invent higher of about 17% on the midpoint from Q4 2020. [2] Alive to in that the company has already delivered 7,225 autos in January, gross sales over February and March are inclined to be a little bit of weaker when put next to January. Even supposing this is presumably due to corporations remaining shut thru the Lunar Contemporary year competition interval that took blueprint in early February, it will also simply light be famed that competition in the electrical SUV blueprint in China is furthermore mounting. Tesla (NASDAQ: TSLA) lately started deliveries of a in the community made model of its Model Y compact SUV. The automobile in all equity competitively priced and can simply build rigidity on luxury EV avid gamers equivalent to Nio. One at a time, the company has indicated that a shortage in semiconductors and batteries is susceptible to in the reduction of its production over Q2 2021 to 7,500 autos per 30 days, down from 10,000.

Explore our diagnosis on Nio, Xpeng & Li Auto: How Produce Chinese EV Shares Compare? for an outline of the monetary and valuation metrics of 3 main Chinese EV avid gamers.

[Updated 2/8/2021] Will Tesla’s Model Y Injure Nio and Li Auto?

Tesla (NASDAQ: TSLA) is initiating deliveries of a in the community made model of its Model Y compact SUV in China. Will this impact high-flying Chinese electric automobile makers Nio (NYSE: NIO) and Li Auto – who specializes in SUVs and bag won a form of traction in the Chinese market in recent quarters. It looks to find it irresistible. There had been indicators of a slowdown for both EV avid gamers in their January 2021 birth figures. Deliveries of Li Auto’s Li-One SUV declined by 12% versus December to 5,379. Nio, too, saw birth growth in January behind to three% when put next to December, when deliveries grew by around 30%. While these traits could maybe well simply now not fully be tied to Tesla’s entry into the crossover market, Tesla is predicted to build rigidity on both corporations.

Tesla has been gaining ground in China. It equipped over 23,000 in the community made Model 3 autos in China in December – that’s more autos than the massive three EV startups Nio, Li Auto, and Xpeng build together. Now the Model Y is arguably going to be more neatly-liked when put next to the Model 3, contemplating about Chinese customer’s preference for crossovers and SUVs. Even supposing the Model Y is now not going to qualify for China’s nationwide subsidy for electric autos, now not just like the Model 3 sedan, Tesla has furthermore priced the auto competitively, initiating at about RMB 339,900 ($52,500). That’s below the RMB 353,600 subsidized initiating designate for Nio’s EC6 SUV, and a little bit of sooner than the RMB 328,000 subsidized designate for Li Auto’s SUVs. Tesla’s stronger world designate image and instrument choices could maybe well presumably invent its autos important more gorgeous to Chinese customers. Tesla furthermore has the dimensions to win on these corporations in the SUV market. Its Shanghai plant which started operations in late 2019 is susceptible to construct as important as half a million autos this year. Compared, Nio is having a gape to invent higher production capability to about 150,000 objects.

Alternatively, Nio and Li Auto attain bag some advantages. Charging infrastructure stays dinky in China, hence Nio is making a wager massive on modular batteries for its EVs that can maybe well even be swapped out in a matter of minutes, serving to to lower fluctuate fright whereas providing batteries as a carrier (BaaS) below a subscription program. In the same way, Li’s focal point is on autos that bag a minute fuel engine that can generate extra electric energy for the battery, decreasing reliance on EV-charging infrastructure. These corporations furthermore bag the backing of the Chinese government and big tech corporations and this could well maybe well dispute an earnings now not apt from the angle of way the market greater, nonetheless furthermore from a regulatory standpoint. Shall we reveal, Nio’s backers encompass Tencent and Baidu. The company has furthermore been bailed out by the Chinese government previously.

Explore our diagnosis on Nio, Xpeng & Li Auto: How Produce Chinese EV Shares Compare? for an outline of the monetary and valuation metrics of 3 main Chinese EV avid gamers.

[1/11/2021] Is Nio Worthy Of A $100 Billion Valuation?

Nio stock has rallied by over 15% over the final week, amid anticipation sooner than the company’s annual Nio day match that was held on Saturday. Nio’s market cap now stands at a whopping $93 billion- nearly as important as Frequent Motors and Ford combined. Does Nio warrant this form of valuation? The company is with no doubt rising hasty, with Earnings poised to double to about $5 billion in 2021 with deliveries rising hasty (Nio delivered a memoir 7,000 automobiles in December). The addressable market is furthermore rising quick, contemplating about that China – Nio’s dwelling country – has blueprint a target that 25% of automobile gross sales by 2025 could maybe well simply light be novel vitality autos which could maybe presumably be now not purely fuel-driven. That being said, is Nio building a competitive earnings to account for its recent valuation and fend off competitors as the market will get more crowded?

Nio looks to be innovating in two key areas – specifically battery technology and self-riding instrument, and this is a enormous piece of the account riding the stock. Nio is making a wager massive on modular batteries for its EVs that can maybe well even be swapped out in a matter of minutes, serving to to lower fluctuate fright whereas providing batteries as a carrier (BaaS) below a subscription program. Alternatively, this is now not going to give the company an edge, as totally different avid gamers can furthermore without distress replicate this. Undoubtedly, China’s EV coverage encourages building in battery swapping. EVs priced above RMB300,000 (around $46,000) are granted subsidies handiest in the occasion that they’ve a swapping option. Nio has furthermore unveiled a denser battery pack with 150 kWh of capability (up from 100kWh currently). This battery option will most definitely be available handiest in late 2022 – nearly 2 years out – and it’s that you just have to maybe well assume that totally different avid gamers could maybe well presumably furthermore bag identical capability batteries by then, working with mainstream battery cell suppliers equivalent to CATL.

The company spent a correct deal of time in the future of its Nio Day match discussing the self-riding tech on its novel sedan due in 2022 and a associated monthly subscription program. The focal point seemed to be more on the hardware equivalent to high-resolution cameras, lidar sensors, and Nvidia processors – all of that are inclined to be available to most totally different automakers. Alternatively, what in actuality affords corporations an edge in self-riding is the quality of instrument and the availability of substantial amounts of files (miles driven) to toughen algorithms. For standpoint, Tesla has logged a total of 3 billion autonomous miles as of ultimate April whereas Google’s Waymo logged about 20 million miles. It’s now not determined how Nio will fare on these counts.

Total, whereas Nio is with no doubt rising hasty, building a designate that’s turning into synonymous with luxury Chinese EVs, its valuation looks rich in our discover, as we don’t watch a sustainable competitive earnings but. Nio now trades at about 18.6x consensus 2021 Revenues, which manner that it is valued similarly to dear Tesla, whose strong instrument and self-riding capabilities partly account for its valuation.

[12/15/2020] Why Has Nio Inventory Been Trending Decrease

Chinese top rate Electrical automobile maker Nio has seen its stock decline by nearly 20% over the final two weeks, falling to ranges of around $41 per share no matter posting a fantastic birth number for the month of November with gross sales more than doubling year-over-year to 5,291 objects. While piece of the decline is possible due to some earnings booking after an over 10x rally this year, Nio’s scramble to lift about $2.65 billion through a sizeable secondary share providing furthermore be troubled the stock. The providing was priced at about $39 per American depositary shares, a in the reduction of designate to the market designate of about $42 as of Friday’s shut. That said, this could well maybe well simply light be a rating certain for the company in the long-elope. The funding light comes at gorgeous valuations (Nio trades at a whopping 23x projected 2020 Earnings, sooner than Tesla) and dilution of existing shareholders is dinky. Moreover, the funds could maybe well simply light give the company a at ease cash cushion, with the proceeds susceptible to be former to fund R&D for designate novel autos and autonomous riding technology and to invent higher the company’s gross sales community.

[Updated 11/18/2020] Is Nio Hyped up?

Nio – the head rate Chinese electric automobile manufacturer – reported its Q3 2020 outcomes on Tuesday, posting a smaller than anticipated quarterly loss, driven by memoir deliveries and greater margins. While Revenues rose by 22% sequentially to RMB 4.53 billion (about $667 million), defective margins expanded by about 480 foundation substances to 12.9% driven by lower subject cloth designate and greater manufacturing effectivity. Nio continues to bag the merit of strong quiz and incentives for EVs in China, guiding that it could well maybe well presumably suppose between 16,500 to 17,000 autos over Q4. This interprets into a sequential growth of on the very least 35%. [3]

Explore our diagnosis Nio, Xpeng & Li Auto: How Produce Chinese EV Shares Compare? which compares the monetary efficiency and valuation of the major U.S. listed Chinese electric automobile avid gamers.

Despite the stronger-than-anticipated outcomes and Q4 guidance, we assume Nio stock looks overestimated. The stock is up by over 12x year-to-date and trades at about 27x projected 2020 Revenues. Compared, Tesla – a more faded EV participant, with strong instrument capabilities and rising exposure to China – trades at about 13x projected gross sales. While Nio’s growth rates are surely greater than Tesla’s, it is furthermore riskier contemplating about the indecent competition in the Chinese EV market, which has plenty of a full bunch of producers.

[Updated 11/16/2020] As Nio Inventory Continues To Surge, Are Traders Getting Ahead Of Themselves?

Nio – the head rate Chinese EV manufacturer – has seen its stock wing a whopping 58% over the final month Trading at about $45 per share, driven by strong birth numbers for October and a conducive regulatory atmosphere in China for EVs. After a 12x rally year to this point, Nio’s market cap is now greater than Frequent Motors. While Nio is little doubt rising quick, with Earnings now heading in the accurate route to double this year, the stock looks overestimated in our discover for a pair of causes. At first, there could be a possibility that Tesla could maybe well presumably give Nio a elope for its money in its dwelling turf, as it prepares to start a in the community made Model Y SUV, which reports dispute will most definitely be priced more cost-effective than Nio’s entry-level SUV ES6, which begins at $54good ample. To boot to to a doubtlessly more cost-effective designate, Tesla’s stronger designate image and instrument choices could maybe well presumably invent its autos important more gorgeous to customers. The company could maybe well presumably furthermore face challenges extra scaling up production. Shall we reveal, Nio recalled about 5,000 autos final year after reports of more than one fires. Nio is furthermore very richly valued at about 26x projected 2020 Revenues, when put next to Tesla which trades at about 12x. While Nio’s growth rates are surely greater than Tesla’s, the dangers are furthermore greater given the indecent competition in the Chinese EV blueprint the put there are over 400 producers.

[11/3/2020] Staunch October Deliveries Force Chinese EV Shares

The stock costs of main U.S. listed Chinese electric-automobile producers soared on Monday, as they reported strong deliveries for October. Nio – one in every of a actually great EV startups in China – saw its stock wing by about 9%, as it reported that deliveries in October nearly doubled year-over-year to 5,055 autos. Xpeng (NYSE: XPEV), but every other top rate EV participant saw its stock upward thrust by about 7%, as it delivered about 3,040 autos thru the month, marking an invent higher of about 230% from a year previously, driven essentially by gross sales of its P7 sedan which was launched earlier this year. Alternatively, deliveries had been a little bit of lower month-over-month. Li Auto (NASDAQ: LI), a company that sells EVs that furthermore bag a minute fuel engine – said that it delivered 3,692 of its Li ONE SUVs in October, marking a month-over-month invent higher of about 5%. The company started production handiest late final year.

[10/30/2020] How Produce Nio, Xpeng, and Li Auto Compare

The Chinese electric automobile blueprint is booming, with China-essentially based mostly producers accounting for over 50% of world EV deliveries. Effect a question to for EVs in China is susceptible to dwell tough as the Chinese government needs about 25% of all novel automobiles equipped in the country to be electric by 2025, up from roughly 5% at recent. [4] While Tesla is a slide-setter in the Chinese luxury EV market driven by production at its novel Shanghai facility, Nio, Xpeng (NYSE: XPEV), and Li Auto (NASDAQ: LI) – three reasonably young U.S. listed Chinese electric automobile avid gamers, bag furthermore been gaining traction. In our diagnosis Nio, Xpeng & Li Auto: How Produce Chinese EV Shares Compare? we compare the monetary efficiency and valuation of the major U.S. listed Chinese electric automobile avid gamers. Substances of the diagnosis are summarized below.

Overview Of Nio, Li Auto & Xpeng’s Industry

Nio, which was founded in 2014, currently affords three top rate electric SUVs, ES8, ES6, and EC6, that are priced initiating at about $50good ample. The company is working on developing self-riding technology and furthermore affords totally different irregular innovations equivalent to Battery as a Service (BaaS) – which permits customers to subscribe for automobile batteries, rather than paying for them upfront. While the company has scaled up production, it hasn’t attain without challenges, as it recalled about 5,000 autos final year after reports of more than one fires.

Li Auto sells Extended-Fluctuate Electrical Autos, that are surely EVs that furthermore bag a minute fuel engine that can generate extra electric energy for the battery. This reduces the want for EV-charging infrastructure, which is currently dinky in China. The company’s hybrid blueprint looks to be paying off – with its Li ONE SUV, which is priced at about $46,000 – ranking as the extinguish-selling SUV in the novel vitality automobile segment in China in September 2020. The novel vitality segment entails gasoline cell, electric, and hurry-in hybrid autos.

Xpeng produces and sells top rate electric autos in conjunction with the G3 SUV and the P7 four-door sedan, that are roughly positioned as competitors to Tesla’s Model Y SUV and Model 3 sedan, even though they’re more cost-effective, with the elemental model of the G3 initiating at about $22,000 post subsidies. The G3 SUV was among the many extinguish 3 Electrical SUVs by blueprint of gross sales in China in 2019. While the company started production in late 2018, in the initiating through a address an established automaker, it has started production at its cling factory in the Guangdong province.

How Appreciate The Deliveries, Revenues & Margins Trended

Nio delivered about 21good ample autos in 2019, up from about 11good ample autos in 2018. This compares to Xpeng which delivered about 13good ample autos in 2019 and Li Auto which delivered about 1k autos, contemplating about that it started production handiest late final year. While Nio’s deliveries this year could maybe well presumably blueprint about 40good ample objects, Li Auto and Xpeng are inclined to suppose around 25good ample autos with Li Auto seeing the supreme growth. Over 2019, Nio’s Revenues stood at $1.1 billion, when put next to about $40 million for Li Auto and $330 million for Xpeng. Nio’s Revenues are inclined to grow 95% this year, whereas Xpeng’s Revenues are inclined to grow by about 120%. All three corporations remain deeply lossmaking as fees associated to R&D and SG&A remain high relative to Revenues. Nio’s Accumulate Margins stood at -195% in 2019, Li Auto’s margins stood at about -860% whereas Xpeng’s margins stood at -160%. Alternatively, margins are inclined to toughen sharply in 2020, as volumes win up.

Valuation

Nio’s Market Cap stood at about $37 billion as of October 28, 2020, with its stock designate rising by about 7x year-to-date due to surging investor hobby in EV stocks. Li Auto and Xpeng, which had been both listed in the U.S. around August as they looked to capitalize on surging valuations, bag a market cap of about $15 billion and $14 billion, respectively. On a relative foundation, Nio trades at about 15x projected 2020 Revenues, Li Auto trades at about 12x, whereas Xpeng trades at about 20x.

While valuations are surely high, investors are possible making a wager that these corporations will continue to grow in the home market, whereas finally playing a higher role in the realm EV blueprint leveraging China’s reasonably low-designate manufacturing, and the country’s ecosystem of battery and auto facets suppliers. Of the three corporations, Nio regularly is the safer wager, contemplating about its a little bit of longer discover memoir, greater Revenues, and investments in technology equivalent to battery swaps and self-riding. Li Auto furthermore looks gorgeous contemplating about its snappy growth – driven by the uptake of its hybrid powertrains – and reasonably gorgeous valuation of about 12x 2020 Revenues.

Electrical autos are the blueprint forward for transportation, nonetheless selecting the accurate EV stocks could maybe well even be great. Investing in Electrical Vehicle Explain Dealer Shares is on the final a correct different to play the growth in the EV market.

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