Nio Inc. American depositary receipts headed deeper into a bear market on Tuesday, but Wall Street focused on the Chinese electric-car maker’s “impressive” hopes for its first-quarter sales.
late Monday reported a 133% jump in fourth-quarter revenue and a wider-than-expected loss. The ADRs traded as low as $44.82 on Tuesday and were recently off about 26% from their Feb. 9 record closing high of $62.84, putting them well into bear-market territory.
Nio shares are 5% in the red this year, but have gained 1,045% in the past 12 months, compared with advances of around 3.6% and 26% for the S&P 500 index
so far this year and in the last 12 months. Nio hit a 52-week low of $2.37 on March 23, 2020.
Edison Yu with Deutsche Bank highlighted Nio’s “impressive” first-quarter guidance, which called for the delivery of about 20,000 to 20,500 vehicles, an increase between 15% and 18% from the fourth quarter’s deliveries. It guided for revenue between $1.13 billion and $1.16 billion for the quarter.
The delivery expectations outline “a very real path to (more than 100,000) deliveries this year, he said.
“We believe this reflects growing awareness and appreciation of its aspirational brand and ecosystem, putting NIO on track to be a market leader in the China premium segment,” Yu said.
The goal of delivering 100,000 is “achievable,” he added.
Dan Ives at Wedbush said that Nio’s “robust” fourth-quarter results “speaks to a transformational EV opportunity playing out in China.” The EV-maker has “massive tailwinds into 2021 as the golden age of EVs takes hold with Tesla, Nio, Xpeng
and others leading the charge in this Chinese market opportunity.”
Ives said the first-quarter delivery guidance was a positive preview for overall demand in the year. Headwinds include the chip shortages’ continued impact on global auto markets and Tesla Inc.’s recent price cuts.
“The Chinese EV market is set to go from 4.5% penetration to 10% in the next 2 years based on our forecasts, as consumer appetite for EV vehicles across the board is jaw dropping and will benefit well positioned domestic vendors as well as foreign players (Tesla
etc.),” Ives said.