Analysts say NIO sales to improve further, EC6 performance highly anticipated-CnEVPost

In their latest report, GF Securities analysts expect NIO sales to improve further with the new EC6 model's performance highly anticipated.

The report notes that NIO unveiled the price for the EC6 on July 24, 2020, and will be delivered in September, priced at RMB 368,000.

The EC6 is positioned as an electric coupe, and follows the basic design framework of the ES6 model, with a sportier, more sporty design than the ES6.

The EC6 is available in Sport, Performance, and Signature editions, with a drag coefficient starting from 0.26Cd and 0-100 km/h acceleration starting from 4.5 seconds.

The EC6 comes with a panoramic sunroof and a roof glass area of approximately 2.1 square meters.

The following is a translation of the full report:

According to NIO's monthly sales announcement on September 3, its August vehicle sales were 3,965 units, an increase of 104.1% year-over-year.

The ES6 model sold 2,840 units, up 58.0 percent, and the ES8 model 1,125 units, up 670.6 percent year-on-year.

From July to August, the NIO delivered a total of 7,498 vehicles, up 169.7% year-on-year. Of these, 5,450 were ES6 models, an increase of 120.7 percent, and 2,048 were ES8 models, an increase of 560.7 percent.

The company's total sales for the second quarter were 10,311 units, up 190.8 percent from the same period last year and up 169.2 percent from the first quarter.

Of these, 8,068 were ES6 models, an increase of 1,853.5 percent year-over-year and 121.5 percent compared to the first quarter.

ES8 models were 2,263 units, down 27.9 percent year-over-year and up a significant 1,060.5 percent from the first quarter.

The significant increase in vehicle sales in the second quarter was attributed to a rebound in vehicle demand caused by the impact of COVID-19 in the first quarter.

NIO's cumulative sales from February 2018 to June 2020 stood at 46,082 units.

NIO is expected to see further improvement in car sales, the performance of new models highly anticipated

NIO expects third-quarter deliveries to be in the range of 11,000 to 11,500 units, according to the company's Sept. 3 sales announcement. 129.2 percent to 139.6 percent year-over-year growth, and 6.5 percent to 11.3 percent growth from the second quarter.

NIO expects third-quarter revenue of RMB4.05 billion to RMB4.21 billion, an increase of 120.4 percent to 129.3 percent year-over-year, and an increase of 8.8 percent to 13.3 percent quarter-over-quarter.

In addition, the company unveiled the prices of the EC6 on July 24, 2020, which will be delivered in September and priced at RMB 368,000.

Positioned as an electric coupe, the EC6 follows the basic design framework of the ES6 model, adding a dynamic sliding back design and a sportier feel compared to the ES6 model.

The EC6 is available in Sport, Performance, and Signature editions, with a drag coefficient starting from 0.26Cd and 0-100 km/h acceleration starting from 4.5 seconds.

The EC6 is equipped with a panoramic sunroof and has a roof glass area of approximately 2.1 square meters.

Rapid revenue growth, positive quarterly gross profit in the second quarter

In terms of operating revenue, the company's first-half revenue was RMB5.09 billion, up 62.1% year-on-year. NIO's automotive revenue for the first half was RMB4.74 billion, up 60.8 percent year-on-year.

Its quarterly revenue was RMB1.37 billion, down 15.9% year-on-year. Automotive revenue was RMB1.26 billion, down 18.2 percent year-on-year.

Revenue for the second quarter was RMB3.72 billion, up 146.5% year-over-year. Revenue from automobiles was RMB3.49 billion, an increase of 146.5% year-over-year.

Its revenue per vehicle was RMB3.60 billion in the second quarter, down 15.2% year-over-year and up 0.7% from the first quarter.

NIO's gross profit for the first half of the year was RMB150 million. Gross loss for the first quarter was RMB170 million, a decrease of RMB50 million from the same period last year.

Gross profit for the second quarter was RMB310 million, with a gross profit margin of 8.4%, which is a turnaround from a loss of RMB500 million in the same period last year, the first time to achieve positive gross profit.

In terms of net loss attributable to ordinary shareholders, it was RMB2.93 billion in the first half of the year, a decrease of RMB3.04 billion compared to the same period last year. Of which, the first quarter was RMB 1.72 billion and the second quarter20 was RMB 1.21 billion.

Overall it is still in the loss state, but the loss margin has narrowed, 63.6% less than the same period last year, and 29.9% less than the loss in the first quarter.

Revenue in the period under review was the highest since its IPO mainly due to a significant improvement in the company's car sales in the second quarter, which totaled 10,331 units, up 190.8 percent from a year earlier.

Costs were lower than the corresponding period and implementation of cost reduction and efficiency measures improved

As for research and development expenses, research and development expenses for the first half of the year amounted to RMB1.07 billion, down 55.1% year-on-year. Of which, RMB630 million and RMB290 million, or 59.5% and 27.6%, were spent on staff salaries and design and development, respectively, representing a decrease of 40.8% and 73.8% YoY.

Depreciation and amortization expenses were RMB94.79 million, representing 8.9% of the total and an increase of 27.5% year-over-year.

Research and development expenses for the first quarter were RMB520 million, down 51.6% year-over-year. Research and development expenses for the second quarter were RMB550 million, down 58.1% year-over-year, and up 4.4% from the first quarter.

Selling and administrative expenses were RMB1.79 billion in the first half of the year, down 34.9% from the same period last year. Employee compensation was RMB750 million, accounting for 42.0% of the total, down 39.0% year-over-year.

NIO sales and administrative expenses were RMB850 million in the first quarter, down 35.7% year-over-year. Second-quarter expenses were RMB940 million, a decrease of 34.1% year-over-year and an increase of 10.4% from the first quarter.

NIO Q2 R&D expenses decreased year-on-year due to a large amount of testing investment before the launch of ES6 models in the same period of 2019, which has returned to normal this year.

NIO sales overheads decreased year-on-year due to the effective implementation of cost reduction and efficiency measures compared to 2019.

NIO's sales overheads increased YoY due to the gradual recovery of the market from the COVID-19 outbreak in the second quarter, which resulted in higher selling and administrative expenses compared to the first quarter.

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