NIO misses expectations but signs of sellers exhaustion places the stock on our radar

NIO, a leading electric vehicle (EV) manufacturer, reported its Q4 (Dec) results. The company missed top and bottom-line expectations. This was the latest poor data point to emanate from the electric vehicle space. The stock slipped lower in reaction to the news. However, shares of NIO have bounced back to move into positive territory. The move is notable given broader weakness in equities. This will put EV plays on the radar as there are signs of seller exhaustion. 

NIO posted a loss of RMB 2.81 per share, worse than the consensus of RMB 2.39. Revenues rose 6.5% year/year to RMB 17.1 billion, falling short of the consensus of RMB 18.16 billion. 

In Q4 2023, vehicle deliveries were 50,045, consisting of 33,679 premium smart electric SUVs and 16,366 premium smart electric sedans, representing an increase of 25.0% from Q4 2022 and a decrease of 9.7% from Q3 2023. Vehicle deliveries for the full year of 2023 were 160,038, representing an increase of 30.7% from 2022.

In Q4 2023, vehicle sales were RMB 15.438 billion, representing an increase of 4.6% from Q4 2022 and a decrease of 11.3% from Q3 2023. Gross profit was RMB 1.279 billion, representing an increase of 105.7% from Q4 2022 and a decrease of 16.0% from Q3 2023. Gross margin was 7.5%, compared to 3.9% in Q4 2022 and 8.0% in Q3 2023.

NIO reported a loss from operations of RMB 6.625 billion in Q4 2023, representing a decrease of 1.6% from Q4 2022 and an increase of 36.8% from Q3 2023. Excluding share-based compensation expenses, adjusted loss from operations (non-GAAP) was RMB 6.059 billion, representing an increase of 0.7% from Q4 2022 and an increase of 42.9% from Q3 2023.

Net loss was RMB 5.367 billion in Q4 2023, representing a decrease of 7.2% from Q4 2022 and an increase of 17.8% from Q3 2023. Excluding share-based compensation expenses, adjusted net loss (non-GAAP) was RMB 4.801 billion, representing a decrease of 5.2% from Q4 2022 and an increase of 21.5% from Q3 2023.

The company issued downside guidance for Q1, expecting Q1 revenue to be between RMB 10.5 and RMB 11.1 billion, compared to Street expectations of RMB 15.93 billion.