NIO Q4 2021 earnings preview
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Nio will begin delivery of the ET7 electric sedan by 2022.
Evelyn Cheng | CNBC
Nio‘s sleek and powerful electric vehicles have captured the attention of investors – and rival automakers – around the world, but they haven’t always been able to power past the supply-chain disruptions that have played havoc with the Chinese company’s ambitious sales-growth plans.
Wall Street analysts are likely to ask Nio senior leaders tough questions on Thursday, asking them about the supply-chain problems and recent price rises. key commodities like nickelThey are most likely to unfold in the next months. Following the close of U.S. markets, the automaker reported fourth-quarter earnings. An earnings webcastThe event will begin at 9:05 p.m. ET.
Nio’s American Depositary Shares were once among the most popular meme-stock high performers, but have struggled in recent months due to a cooling relationship between the U.S.and China.
Nio’s earnings reports aren’t going to surprise much. Nio delivered just over 25.000 vehicles during the quarter. high end of its guidanceRange (23,500 to 25,000. Investors should keep checking for news on Nio’s attempts to grow its dealer network and begin sales in new European markets.
They’ll also want to know more about Nio and its plans to grow the network of recharge stations which are the foundation of the company’s unique sales strategy. If they sign up for the company’s battery-swap services, buyers can choose to buy a Nio with no battery packs at a considerable discount.
Although Nio isn’t covered widely by U.S banks, the Wall Street analysts that responded to a Refinitiv Survey expect Nio will post a loss in excess of 2.97 Chinese Yuan ($0.47) per share. Eight analysts predicted that Nio would report revenue of $8.682 billion Yuan ($1.36 Billion) on an average.
Supply Chains and Outlook
These analysts may have questions about the fourth quarter’s margins and costs, but what really matters is the guidance provided by the company for the next quarter.
As many other automakers were forced to decrease production, Nio was also affected by supply-chain disruptions in 2021. These included shortages of specific types of semiconductor chip used in cars. Nio’s ability to manage supply-chain challenges has allowed it to maintain an average production rate of 10,000 to 11,000 cars per month over the past months. Due to factory shutdowns around Chinese Lunar New Year festivities, deliveries fell below this level by just 6131 vehicles in February.
Edison Yu, Deutsche Bank analyst, closely monitors Nio’s domestic rivals. He wrote a note on March 20 that dismissed supply-chain concerns and stated that he expected the company’s output to increase significantly in the coming months.
“We see the [manufacturing]Yu said that Yu expects the company’s run rate to rise from 15,000 to 20,000 per monthly by June. After that, he believes, a new factory – expected to be up and running in the fall — will help the company ramp up its production output to 30,000 per month by sometime in the first half of 2023.
If it goes as planned, sales will see a rise from three new Nio models in 2022: two sedans, and one SUV. Nio said that the production of one of two larger sedans called the ET7 (a technology-packed model) began Thursday morning. in a WeChat post.
Yu feels that Nio will face rising raw material prices over the next few weeks. But he also notes that Nio has a plan in place to deal with that. lower-cost lithium iron phosphateLFP (or ) batteries are included in the standard range models.
Yu continues to be bullish about Nio and has a buy rating with a target price of $50
Morgan Stanley analyst Tim Hsiao remains bullish on Nio. However, he reduced his target price to $34 in a Tuesday note from $66. This is due to the stock’s recent slide. Hsiao stated that Nio will face “elevating macro headwinds” and “severe supply challenges” in the short term, however, he believes that Nio’s “superior liquidity” and “revenue visibility” make it well-equipped to weather any downturn.
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