Nio’s smooth and highly effective electrical autos have captured the eye of traders – and rival automakers – world wide, however they have not all the time been capable of energy previous the supply-chain disruptions which have performed havoc with the Chinese language firm’s bold sales-growth plans.
Wall Road analysts on Thursday will possible ask Nio’s senior management some robust questions on how these supply-chain points, and the current speedy value will increase affecting key commodities like nickel, are more likely to play out in coming months. The automaker stories its fourth-quarter earnings after the U.S. markets shut. An earnings webcast is scheduled to start at 9 p.m. ET.
As soon as among the many meme-stock excessive flyers, Nio’s American depositary shares have had a tough time over the previous a number of months as relations between the U.S. and China have cooled.
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Nio’s earnings report itself is not more likely to maintain plenty of surprises. The corporate delivered simply over 25,000 autos within the quarter, close to the excessive finish of its steering vary (23,500 to 25,500). Buyers will probably be listening for updates on Nio’s efforts to broaden its seller community in China and to start gross sales in a number of new European markets.
They can even be in search of particulars on Nio’s plans to broaden the community of battery-swap stations which are the spine of the corporate’s modern gross sales mannequin. Consumers can decide to buy a Nio with out a battery pack, at a considerable low cost, in the event that they subscribe to its battery-swap service.
Nio is not broadly coated by U.S. banks, however the 4 Wall Road analysts who answered a Refinitiv survey count on Nio to submit a lack of 2.97 Chinese language yuan ($0.47) per share, on common. Eight analysts mentioned they count on Nio to report income of 8.682 billion yuan ($1.36 billion), on common.
Provide chains and outlook
These analysts will possible have some questions across the fourth quarter’s prices and margins, however the actual story will most likely be within the firm’s steering for the present quarter and the total 12 months.
Nio, like many different automakers, was pressured to scale back manufacturing at occasions in 2021 as a consequence of supply-chain disruptions, together with a world scarcity of the sorts of semiconductor chips utilized in autos. In current months Nio has been capable of work round these supply-chain points and preserve a manufacturing charge between 10,000 and 11,000 autos a month. (Deliveries dipped beneath that stage in February, to only 6,131, due to manufacturing unit downtime round China’s Lunar New Yr celebrations.)
Deutsche Financial institution analyst Edison Yu watches Nio and its key home rivals intently. In a March 20 observe, he dismissed supply-chain worries and mentioned that he expects the corporate’s manufacturing output to rise considerably over the following a number of months.
“We see the [manufacturing] run-rate growing to fifteen,000-20,000 monthly by June,” Yu wrote. After that, he believes, a brand new manufacturing unit – anticipated to be up and working within the fall — will assist the corporate ramp up its manufacturing output to 30,000 monthly by someday within the first half of 2023.
Assuming it performs out that method, that gross sales development will get a lift from the three new fashions that Nio is predicted to launch in 2022, two sedans and an SUV. Manufacturing of the bigger of the 2 sedans, a tech-packed mannequin known as the ET7, started on Thursday morning, Nio introduced in a WeChat submit.
Yu thinks that rising uncooked materials prices will put stress on Nio’s margins over at the least the following few months, however he notes that the corporate has a plan to deal with that by utilizing lower-cost lithium iron phosphate, or LFP, batteries in its standard-range fashions.
Yu stays bullish on Nio with a purchase score and a value goal of $50.
Morgan Stanley analyst Tim Hsiao can be nonetheless bullish on Nio, however he minimize his financial institution’s value goal to $34 from $66 in a Tuesday observe, reflecting the inventory’s current slide. Hsiao wrote that “elevating macro headwinds and extreme provide challenges” will make the close to time period difficult for Nio, however he feels that its “superior liquidity and income visibility” have it well-positioned to experience out any financial downturn.