Nio posted third-quarter revenue that beat expectations, but net loss attributable to ordinary shareholders widened, triggering a sharp jolt in its stock price in after-hours trading.
Nio reported third-quarter revenue of RMB 9.81 billion ($1.52 billion), up 117 percent from a year earlier and up 16 percent from the second quarter, according to unaudited results it posted after the close of US stock markets on Tuesday.
This was higher than Wall Street expectations of RMB 9.316 billion in a Bloomberg survey and RMB 4.526 billion in the same period last year.
Nio reported vehicle sales revenue of RMB 8.64 billion in the third quarter, up 102 percent year-on-year and up 9 percent from the second quarter, but slightly below analysts' expectations of RMB 8.67 billion. The company delivered 24,439 vehicles in the third quarter.
The company reported a net loss of RMB 835 million in the third quarter, down 20 percent year-on-year, but up 42 percent from the second quarter. After excluding share-based compensation expenses, adjusted net loss was RMB 570 million, down 43 percent year-on-year and up 70 percent from the second quarter.
It reported a net loss attributable to ordinary shareholders of RMB 2.86 billion in the third quarter, above market expectations for a loss of RMB 726 million. This was a 141 percent increase from the same period last year and a 334 percent increase from the second quarter.
Nio reported a loss of RMB 0.36 per ADS in the third quarter, below analysts' expectations of a loss of RMB 0.64.
Nio's explanation for this is as follows:
In the third quarter of 2021, Nio repurchased 1.418 percent equity interest in Nio China from a minority strategic investor for a total consideration of RMB2.5 billion and recorded an amount of RMB2,023.5 million (US$314.0 million) in accretion on redeemable non-controlling interests to redemption value.
Excluding share-based compensation expenses and accretion on redeemable non-controlling interests to redemption value, adjusted net loss attributable to Nio's ordinary shareholders (non-GAAP) was RMB569.7 million (US$88.4 million).
In September, Nio completed the increase of its controlling equity interests in Nio China through the purchase of certain investor's equity interests and the subscription for newly increased registered capital. It currently holds an aggregate of 92.114 percent controlling equity interests in Nio China.
Nio's gross margin was 20.3 percent in the third quarter, higher than 18.6 percent in the second quarter and 12.9 percent in the same period last year. The consensus estimate of Wall Street analysts was 17.7 percent.
The vehicle margin was 18.0 percent, down from 20.3 percent in the second quarter and higher than 14.5 percent in the same quarter last year.
"We achieved new heights with our third quarter delivery while upholding a healthy financial performance with a 18.0% vehicle margin and a 20.3% gross margin, including the sales of regulatory credits," said Steven Feng, Nio's chief financial officer.
The company expects fourth-quarter revenue of RMB 9.38 billion to RMB 10.11 billion, up about 41.2 percent to 52.2 percent from the same period in 2020. This compares with analyst estimates of RMB 10.84 billion.
It is guiding for fourth-quarter deliveries of 23,500 to 25,500 units, up about 35.4 percent to 46.9 percent from the same period in 2020 and down about 3.8 percent to about 4.3 percent from the third quarter of 2021.
Considering that it delivered 3,667 units in October, this means that the company's combined deliveries in November and December would be in the range of 19,833-21,833 units.
"Despite the continued supply chain volatilities, our teams and partners are working closely together to secure the supply and production for the fourth quarter of 2021," said William Li, founder, chairman, and CEO of Nio.
"Meanwhile, we are fully dedicated to accelerating our products and technologies development and bringing the three new products based on Nio Technology Platform 2.0 to users in 2022 to lead the smart EV transformation and adoption," Li added.
As of today, Nio has sold 33,175,896 ADSs under the on-going at-the-market offering program as previously announced on September 7, and has raised gross proceeds of approximately $1.2 billion, it said.
Nio shares fell more than 5 percent at one point in after-hours trading after the earnings announcement, but by press time, the decline had narrowed to less than 2 percent.
With Tesla shares plunging 12 percent on Tuesday, US-listed Chinese electric car stocks were down, with Nio and Xpeng Motors both down about 6 percent and Li Auto down 4.37 percent in regular trading sessions.
Here are the highlights from Nio's press release:
Vehicle sales were RMB8,636.8 million (US$1,340.4 million) in the third quarter of 2021, representing an increase of 102.4% from the third quarter of 2020 and an increase of 9.2% from the second quarter of 2021.
Vehicle margin was 18.0%, compared with 14.5% in the third quarter of 2020 and 20.3% in the second quarter of 2021.
Total revenues were RMB9,805.3 million (US$1,521.8 million) in the third quarter of 2021, representing an increase of 116.6% from the third quarter of 2020 and an increase of 16.1% from the second quarter of 2021.
Gross profit was RMB1,993.2 million (US$309.3 million) in the third quarter of 2021, representing an increase of 240.3% from the third quarter of 2020 and an increase of 26.6% from the second quarter of 2021.
Gross margin was 20.3%, compared with 12.9% in the third quarter of 2020 and 18.6% in the second quarter of 2021.
Loss from operations was RMB991.9 million (US$153.9 million) in the third quarter of 2021, representing an increase of 4.9% from the third quarter of 2020 and an increase of 29.9% from the second quarter of 2021. Excluding share-based compensation expenses, adjusted loss from operations (non-GAAP) was RMB726.3 million (US$112.7 million) in the third quarter of 2021, representing a decrease of 19.0% from the third quarter of 2020 and an increase of 41.9% from the second quarter of 2021.
Net loss was RMB835.3 million (US$129.6 million) in the third quarter of 2021, representing a decrease of 20.2% from the third quarter of 2020 and an increase of 42.3% from the second quarter of 2021. Excluding share-based compensation expenses, adjusted net loss (non-GAAP) was RMB 569.7 million (US$88.4 million) in the third quarter of 2021, representing a decrease of 42.9% from the third quarter of 2020 and an increase of 69.7% from the second quarter of 2021.
Net loss attributable to Nio's ordinary shareholders was RMB2,858.9 million (US$443.7 million) in the third quarter of 2021, representing an increase of 140.7% from the third quarter of 2020 and an increase of 333.6% from the second quarter of 2021. In the third quarter of 2021, Nio repurchased 1.418% equity interest in Nio China from a minority strategic investor for a total consideration of RMB2.5 billion and recorded an amount of RMB2,023.5 million (US$314.0 million) in accretion on redeemable non-controlling interests to redemption value. Excluding share-based compensation expenses and accretion on redeemable non-controlling interests to redemption value, adjusted net loss attributable to Nio's ordinary shareholders (non-GAAP) was RMB569.7 million (US$88.4 million).
Basic and diluted net loss per American Depositary Share (ADS)iii were both RMB1.82 (US$0.28) in the third quarter of 2021. Excluding share-based compensation expenses and accretion on redeemable non-controlling interests to redemption value, adjusted basic and diluted net loss per ADS (non-GAAP) were both RMB0.36 (US$0.06).
Cash and cash equivalents, restricted cash and short-term investment were RMB47.0 billion (US$7.3 billion) as of September 30, 2021.
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