NIO Inc - CGS-CIMB Research 2023-09-08: EV Deliveries Set To Accelerate In 3Q/4Q23

• NIO Inc (SGX:NIO)’s 2Q23 non-GAAP net loss widened 31% q-o-q (more than doubled y-o-y) to RMB5.44bn due to lower electric vehicle (EV) delivery and EV margin as a result of increased competition and transition to new models.
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  • Vehicle margin fell from 16.7% in 2Q22 to 6.2% in 2Q23, albeit up from 5.1% in 1Q23, due to a product mix change compared to 2Q22 and lower promotion discounts.

EV delivery to be lower in FY23-25F on increased competition

• NIO projects 55k-57k EV delivery in 3Q23F, a 74-80% y-o-y increase.
  • NIO shipped 20k units in July, up 104% y-o-y or 67% q-o-q, implying EV shipments of 18k each in July and August, mainly driven by the ES6 SUV and ET5/ET5T sedan.
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  • We see stronger EV delivery in 4Q23F with the debut of the newly upgraded mid-size coupe SUV EC6 (delivery began in September) and expanded sales channels.
• We reduce our FY23F EV delivery forecast by 20k units to 175k (+43 y-o-y) given increased competition in the high-end segment (Rmb250k-400k).
• We also reduce our EV delivery forecasts for FY24F and FY25F by 10k and 9k units to 240k (+37% y-o-y) and 310k units (+29% y-o-y), respectively.

GPM to improve on lower production costs from new platform

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Ray KWOK CGS-CIMB Research | https://www.cgs-cimb.com 2023-09-08 SGinvestors.io

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