4Q25 results above profit-alert guidance – NIO (SGX:NIO) reported in-line 76% y-o-y revenue growth to RMB34.7bn in 4Q25. Stronger deliveries and better product mix expanded gross profit margin by 5.8ppt to 17.5%, largely driven by hit models ES8 and ONVO L90.
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Non-GAAP operating profit reached RMB1.25bn (from RMB5.5bn loss in 4Q24), ahead of prior profit-alert guidance of RMB800-1200mil & achieving quarterly operating breakeven for the first time, translating into RMB728mil adj. net profit for 4Q25 (vs RMB6.5bn loss in 4Q24).
Strong 1Q26 guidance.
While NIO’s 1Q26 delivery target of 80–83k units (+90–97% y-o-y) was ~8% below market expectations, revenue guidance of RMB24.5–25.2bn (+103-109% y-o-y) is 3-6% ahead, largely attributable to mix improvement driven by higher-ASP model ES8.
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Cost control initiatives start to bear fruit; cash flow concerns easing.
NIO’s cost reduction efforts are showing tangible results, with 4Q25 R&D/SG&A expenses declining 44%/28% respectively, reflecting progress from management’s recent corporate restructuring and workforce streamlining.
We expect benefits to continue materializing in coming quarters, increasing the likelihood of upside surprise in operating profit and easing investor concerns over persistent net losses and cash burn.
Meanwhile, newly launched models ES8 and ONVO L90 have shown improved sales momentum. If upcoming 2026 models (launching in 2Q) replicate this success, it could trigger a fresh re-rating for the stock.
Upgrade to BUY; new target prices of HKD60/US$7.70 (vs prev HKD52/US$6.60).
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Above is an excerpt from a report by DBS Group Research. Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.
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