With the rapid increase in new energy vehicle penetration in China, the Model Y price cut will have limited impact on Nio, and new energy vehicle companies will move forward together, said CICC, a top Chinese investment bank, in a report released on Monday.
CICC maintained its Outperform rating on Nio and raised its price target by 15% to $60, corresponding to a 23% upside.
CICC noted that Nio's data released on January 3 showed record December sales of 7,007 units, up 121% year-on-year and up 32.4% from the previous month.
Nio sold 17,353 units in the fourth quarter, up 111 percent year-on-year and 42.2 percent from the previous quarter, exceeding the company's previous quarterly delivery guidance of 16,500-17,000 units. A total of 43,728 units were delivered for the full year of Nio 2020, up 113 percent year-over-year.
CICC believed that Nio has sufficient orders on hand and the slowdown in November is mainly due to a slower capacity ramp. In the third quarter earnings meeting, Nio expected to achieve a monthly capacity of 7,500 units in January 2021. The December figures show that it is on track for capacity release, CICC said.
On January 3, Nio released its official used car business, Nio Certified, announcing that it will operate officially used cars to serve customers through self-operating.
CICC said that the Nio used car business will help the company close the loop of its direct sales and service system, solving the selling and replacement aspects of the car ownership cycle while helping to increase user loyalty and repurchase rates.
In December, Nio completed a $2.65 billion ADR offering, which will provide the company with the capital it needs for future growth.
According to CICC, Nio continues to invest in core technology research and development, and continues to lead business model innovation, launching NOP, 100kWh battery, battery rental service BaaS, while Nio built 49 new battery swap stations and 80 supercharging stations in 2020, bringing a better pure electric travel experience to users.
On January 9, Nio will hold Nio Day 2020, where the new sedan model and intelligent driving platform NT2.0 will be released at the same time. CICC believes that Nio will increase its investment in intelligence in the future, and the continuous improvement of products and services is expected.
CICC said that the Model Y price cut will have a limited impact on Nio as the penetration of new energy vehicles is rapidly increasing, and that new energy vehicle companies will work to move forward together.
CICC said it adjusted Nio's 2020 and 2021 net loss forecasts to RMB 5.50 billion and RMB 3.80 billion and expected its 2022 net loss forecast to be RMB 1.01 billion. CICC maintained its Outperform rating on Nio.
CICC raised the market capitalization of Nio's hardware (vehicle sales) and software (smart driving) segments and raised the price target by 15% to $60, corresponding to a 23% upside.
Nio rose 3.8% to $50.6 in pre-market Monday.
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