Nio goes deeper into bear market after earnings

US deposit receipts for Nio Inc. moved further into a bear market on Tuesday, but Wall Street focused on the Chinese electric car maker’s “impressive” hopes for its first-quarter sales.

Nio NIO,
Monday night reported a 133% increase in fourth-quarter revenue and a larger-than-expected loss. ADRs traded as low as $ 44.82 on Tuesday and were recently down about 26% from their February 9 closing all-time high of $ 62.84, putting them in bear market territory.

Nio’s shares are 5% in the red this year, but have gained 1.045% in the past 12 months, compared to gains of around 3.6% and 26% for the S&P 500 SPX Index.
so far this year and in the last 12 months. Nio touched a 52-week low of $ 2.37 on March 23, 2020.

Deutsche Bank’s Edison Yu highlighted Nio’s “impressive” Q1 guidance, which called for the delivery of between 20,000 and 20,500 vehicles, a 15-18% increase over Q4 deliveries. Led by revenue between $ 1.13 billion and $ 1.16 billion for the quarter.

Delivery expectations describe “a very real road for (over 100,000) deliveries this year, he said.

“We believe this reflects a growing awareness and appreciation of its aspirational brand and ecosystem, putting NIO on the right path to be a market leader in China’s premium segment,” Yu said.

The goal of delivering 100,000 is “achievable,” he added.

Wedbush’s Dan Ives said Nio’s “strong” fourth quarter results “speak of a transformative EV opportunity in China.” The electric vehicle maker has “massive tailwinds in 2021 as the golden age of electric vehicles takes hold with Tesla, Nio, Xpeng XPEV,
Li Auto LI,
and others leading the charge in this Chinese market opportunity. “

Ives said the first quarter delivery guidance was a positive development for overall demand for the year. Headwinds include the continued impact of chip shortages on global auto markets and recent price cuts from Tesla Inc.

“The Chinese market for electric vehicles will go from a penetration of 4.5% to 10% in the next 2 years according to our forecasts, as the appetite of consumers for electric vehicles in general is staggering and will benefit both domestic suppliers as well as foreign players (Tesla TSLA,
Ford F,
+ 4.11%,
G’M G’M,
+ 3.46%,
etc.), ”said Ives.


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