- NIO Inc. (SGX:NIO) achieved positive operating cash flow in 3Q23, thanks to the new product delivery ramp-up. 3Q23 total revenue increased 46% y-o-y to RMB19.1bn, and vehicle deliveries reached 55.4k units, in-line.
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- With R&D and SG&A (selling, general, and administrative) expenses rising by 3.2% and 33.1% respectively, R&D and SG&A expenses as % of total revenue stood at 15.9% and 18.9% respectively, much lower q-o-q (vs 2Q23’s 38.1% and 32.6%).
- While non-GAAP (non-Generally Accepted Accounting Principles; non-GAAP figures are not required to include non-recurring or non-cash expenses) net loss widened 14% y-o-y to RMB3.9bn, the performance was better than market expectations and was the best quarter with the smallest net loss so far in 2023.
Continuous product ramp-up drives volume shipments.
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- We believe the trend is encouraging, given that the new product line-up on the NT2 platform is completed with the latest model EC6 launched in Sep. However, total revenue in 4Q23 is expected to grow only 0.1-4.0% y-o-y to RMB16.1-16.7bn, which we believe is due to intense market competition.
- Besides, NIO is achieving certain milestones in its autonomous driving (AD) development, i.e. navigate on pilot (NOP Plus) on both urban and highways, covering about 60,000km of mileage and targeting to penetrate some 100 cities by end 2023. This on-going development will enhance the company’s competitiveness in advanced products and technology development, especially when the Chinese peers are racing ahead in this space.
Expect vehicle margins to further improve in 4Q23.
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