NIO - DBS Research 2023-06-12: Well Positioned For Strong Sales Rebound

• A new vehicle platform and battery swap network expansion key to future growth – NIO (SGX:NIO) is well positioned to enter its next expansion phase with the NT2 vehicle platform to support faster and more advance BEV launches, especially with the launch of its mid-market brand in 2H24.
• - Read this at SGinvestors.io -

Anticipate higher volume shipment to boost vehicle margins

• NIO’s 1Q23 total revenues increased 7.7% y-o-y to RMB10.7bn, slightly missing guidance of ~Rmb11bn as a result of intense market competition and impact of model changes with older models being phased out. This also dragged vehicle margins down by 13ppts y-o-y to 5.1%, the lowest since 2Q20.
• - Read this at SGinvestors.io -
• While 2Q23 outlook remains challenging due to vehicle platform transition, we anticipate 2H23 would be better arising from higher new model shipments.
• NIO has started deliveries of the All-New ES6 model in May-23, and the production ramp up of ES6 from July as well as the planned launches of ET5, ES8 and EC6 in the coming months should boost its monthly volume shipment to about 20k units by 4Q, up from about 8k per month in 2Q. The higher volume shipment should lift its vehicle margins to low double digits in 3Q and to about 15% in 4Q, compared to 5.1% in 1Q. The NT2 platform is expected to support vehicle margins at around 20%.
• NIO's total cash and cash equivalents stood at RMB37.8bn at end Mar-23, compared to RMB45.5bn at end Dec-22. The company is monitoring its new project investment closely to ensure sufficient liquidity to support its business operations. Capex at about RMB3-3.5bn per quarter is expected.

NIO - Earnings forecast & target price

• Read more at SGinvestors.io.

Rachel Miu DBS Group Research | https://www.dbs.com/insightsdirect/ 2023-06-12 SGinvestors.io

---