NIO reported Q2 earnings earlier today that exceeded Wall Street's expectations, and Deutsche Bank analyst Edison Yu's team released their initial take.
NIO reported revenue of RMB 8.45 billion ($1.3 billion) in the second quarter, beating analysts' estimates of RMB 8.29 billion and coming in close to the upper end of its guidance range of RMB 8.5 billion.
The company's overall gross margin was 18.6 percent in the second quarter, doubling from 8.4 percent in the second quarter last year, but below market expectations of 19 percent and 19.5 percent in the first quarter.
Yu's team said this could be due to lower supply chain efficiency.
NIO's adjusted loss per ADS of RMB 0.21 in the second quarter was smaller than the market's expectation of a loss of RMB 0.51 and narrowed by 80 percent from the same period last year.
Yu's team attributed this to higher share-based compensation (SBC) (251m vs. 1Q's 96m), which was excluded from Non-GAAP earnings.
NIO expects to deliver 23,000 to 25,000 EVs in the third quarter, representing a 5 percent -14.2 percent increase in deliveries from the second quarter and an 88.4 percent -104.8 percent increase from the same period last year.
Yu's team believes the guidance is likely constrained by supply chain shortages involving semis, air suspension shock absorbers from Germany (due to flooding), and also potentially powertrain related parts as a result of the recent Nanjing COVID outbreak (XPT factory based there).
"This should translate into sales of 8.91-9.63bn RMB, coming in between our/consensus forecasts at the mid-point," the team said.
In addition to announcing key financial figures, NIO also revealed its plans for next year, saying it aims to deliver three NIO Technology Platform 2.0-based products in 2022, including its flagship sedan, the ET7, which was launched earlier this year.
"Thus far, only the ET7 sedan has been officially unveiled and we expect a smaller sedan to also hit the market. With this, we do think NIO has accelerated its launch cadence as a response to more competitive local market dynamics and should be well positioned for robust volume growth in 2022," the team said.