The team said Nio's sales are expected to recover to the level of 10,000 units in both November and December, and is expected to achieve over 90,000 units for the whole year.
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In the medium to long term, Nio is expected to become a company that catches up with Tesla due to its ability to continue to raise capital, strong R&D team, internet thinking approach to car making, differentiated product competitiveness and continuous product iteration, CITIC Securities said in its latest research report.
CITIC Securities maintained a "Buy" rating on Nio, giving it a valuation of 8x PS in 2022, corresponding to a target market cap of $74 billion.
The rating and target market cap are in line with what the team issued when they initiated coverage of Nio on October 11, when they gave Nio a price target of $45.
Nio released data on November 1 that showed it delivered 3,667 vehicles in October, down 27 percent year-on-year and 65.5 percent from September. The deliveries were its lowest since July last year and below Xpeng Motors' 10,138 vehicles and Li Auto's 7,649 vehicles.
CITIC Securities said this was mainly due to a significant drop in production due to an 18-day-long renovation of the JAC Nio plant.
The renovation was used to boost the original capacity on one hand and to add equipment for the production of the new model ET7 on the other, so it took a long time and had a big impact on production and sales, the team noted.
Nio's new orders hit a new high again in October, and the continued high boom in demand was verified, the team said.
Nio's production and sales are expected to return to 10,000 units per month in November and December, and is expected to achieve more than 90,000 units for the year, CITIC Securities said.
With the delivery of the company's first sedan, the ET7, starting early next year, its model matrix will be further enriched and sales are expected to reach a new level, the team said.
CITIC Securities said they are bullish on Nio's competitive advantage and investment value in the smart EV segment with strong long-term growth certainty.
In the future, as EV penetration increases and the market space for luxury models further expands, the company will continue to benefit from its business model with premium service, NAD smart driving solution, BaaS battery rental solution and fast battery swap, the team said.
Considering that the smart EV market industry has entered a high growth phase and leading local Chinese companies are entering an arms race in smart driving, a PS valuation range of 5-10x over the next year is a reasonable range for the new carmakers, the team said.
Nio has the highest win rate in building a premium brand and a solid position among local premium brands, CITIC Securities said, adding that they refer to valuations of Tesla and the new car makers, giving Nio a valuation of 8x PS based on a 2022 operating revenue forecast of 59.8 billion yuan.
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