Nio released data yesterday. It delivered 2,528 vehicles in November (down 18% year-on-year, flat month-on-month), and the delivery volume in the first 11 months of 2019 reached 17,395 units (a year-on-year increase of 117%).
According to Citigroup calculations, under a more conservative scenario, if Nio delivers 2,700 vehicles in December (down 18% year-on-year as in November), it means that full-year net profit will face the risk of falling by 18%. If Nio's December deliveries are the same as the same period last year, the risk of a decline in its net profit will be 17%. If its December deliveries increase by 30... year-on-year, the downside risk of net profit narrows to 16%.
Considering the headwinds the company and the new energy vehicle industry will face in the short term, the bank believes that compared with Nio's previous 2020 target, delivering 40-45k vehicles (a year-on-year increase of 2-2.5 times) seems to be a more realistic goal. Based on the analysis, this delivery assumption means that the current forecast for Nio's net profit in 2020 will be lowered by 158%-173%.
Citigroup believes that if the government does not introduce stimulus measures in the first half of 2020, B-class pure electric vehicles (such as ES6) may continue to outperform the entire new energy vehicle industry in the short term, because the market demand for medium-sized pure electric vehicles is relatively stable. And its own base is low. In October 2019, sales of B-segment pure electric vehicles in China increased 16 times year-on-year, while sales of all other vehicles declined year-on-year.
It is worth noting that ifTeslaSet the price of its domestically produced Model 3 at a competitive price below 280,000 yuan, then starting from the second half of 2020, Tesla's relatively new market layout in China may give Nio and othersLuxuriousSales of pure electric vehicles are putting pressure.
Last, but not least, Citi emphasized that if Nio can find new investors to fill the cash flow gap next quarter, it will be a catalyst for its valuation recovery.
In addition, the main risk factors that may prevent Nio's share price from reaching Citi's target price include: failure to design and manufacture cars that meet quality requirements on a large scale; Increased competition; Demand is lower than expected; Inability to provide customers with standard-compliant services for profit; And product quality issues.
Comments