Pacific Securities has a buy rating on Nio's Hong Kong-traded shares, with a target price of HK$103.62, implying an upside of 26.14 percent.
China-based brokerage Pacific Securities initiated coverage of Nio (NYSE: NIO) with a Buy rating, saying the electric vehicle (EV) maker's weekly sales performance has been stellar and July deliveries are expected to hit a record high.
Nio is expected to launch a new entry-level SUV later this year, and is on track to deliver 160,000 vehicles for the full year, driven by the new model and the new ES6 and ET5 Touring, Pacific Securities analyst Wen Ji said in a research note on July 18.
The analyst didn't mention anything more about the new model, though it would be the new EC6 coupe SUV.
Nio has continued to switch models based on the NT 1.0 platform to the latest NT 2.0 platform over the past few months, and the EC6 is the only one left that has yet to complete the switch. Spy shots of the new EC6 were already seen on the streets of China a month ago.
The EV maker launched the new ES6 on May 24, with deliveries starting on the same night of the launch. The ET5 Touring was launched on June 15, with deliveries starting on June 16.
Driven by industry recovery, platform upgrade, price cut and the rollout of City NOP+, Nio's second-half sales rebound trend is clear, Pacific Securities said.
Nio is expected to see monthly deliveries of over 15,000 units in the third quarter and monthly sales of up to 20,000 units in the fourth quarter, according to the analyst.
Notably, Nio's management had said earlier this year that the company was targeting to double its sales this year from last year. Nio delivered a total of 122,486 vehicles in 2022 and doubling that would mean more than 240,000 units.
In the first half of the year, Nio delivered 54,561 vehicles, up just 7.35 percent from 50,827 in the same period last year.
Nio sold 3,900 units last week, up 25.81 percent from 3,100 units in the previous week, according to data shared by Li Auto yesterday.
Between July 1 and July 16, the Nio sold 8,000 units, according to Li Auto's table.
Looking at weekly insurance registration data, Nio sales continued to grow in the second week of July, mainly due to the full switch to the NT 2.0 platform for its models, coupled with an RMB 30,000 ($4,150) reduction in the starting prices for the entire model lineup, Pacific Securities said.
Looking ahead to the third and fourth weeks of July, insurance registrations of Nio vehicles are expected to continue to climb, the brokerage's research note said.
Pacific Securities expects Nio to generate revenue of RMB 53.19 billion, RMB 110.3 billion and RMB 133.8 billion from 2023 to 2025, respectively.
The analyst expects Nio to post a loss of RMB 15.63 billion in 2023, a loss of RMB 8.68 billion in 2024, and a profit of RMB 640 million in 2025.
Pacific Securities has a Buy rating and a HK$103.62 price target on Nio's Hong Kong-traded shares.
Nio closed down 0.48 percent to HK$82.15 in Hong Kong today, and the price target implies an upside of 26.14 percent.
($1 = RMB 7.2220)
