Q2 revenue and sales hit new highs, Neta Auto's US shares achieved three consecutive gains

NIO (NIO.US) stock maintains its upward trend, gaining positive recognition from the capital market. Since the release of its September 5 earnings report, NIO's US shares have risen for three consecutive days, with a cumulative increase of more than 31%. After the release of the earnings report, NIO's Hong Kong shares rose 13.05% on the first trading day and continued to rise today. As of the time of writing, NIO's Hong Kong shares have risen more than 10%.

After the release of the earnings report, Morgan Stanley raised its rating on NIO's ADR to overweight with a target price of US$8. Yuan Cheng Cable raised its rating on NIO's H shares to buy with a target price of HK$45. BOC International's research report on September 9 believes that NIO's gross margin will further improve in the third quarter as sales improve and its promotional strategy is adjusted. It sets a target price of HK$59.88 and gives a "buy" rating.

The earnings report shows that NIO's revenue and sales in the second quarter reached record highs, with revenue of Rmb17.45bn, up 98.9% YoY and 76.1% QoQ; sales of 57,373 units, up 143.9% YoY and 90.9% QoQ; gross margin of vehicles 12.2%, up 6 percentage points YoY and 3 percentage points QoQ, leading the pure electric track; loss narrowed by 16.7% YoY; R&D investment of Rmb3.22bn, with a cumulative R&D investment of Rmb50bn since 2016. As of the end of the second quarter, NIO's cash reserves reached Rmb41.6bn.

NIO also released its strongest quarterly guidance: it expects to deliver 61,000-63,000 vehicles in the third quarter and expects revenue of Rmb19.11bn-19.67bn, both of which will set new highs.  

NIO's cumulative R&D investment of Rmb50bn has brought breakthroughs in core technologies such as intelligent driving chips, vehicle operating systems and intelligent chassis, forming a scale effect in the multi-brand stage and laying a solid technological foundation.

NIO founder Li Bin said in the earnings conference call that NIO's second brand Leaguer's first model L60 will be listed on September 19 and begin delivery in September. "We are confident in the comprehensive competitiveness of L60. In the next step, we will fully guarantee the production ramp-up work to meet market demand. The market for Leaguer is an 8mn-plus market, combined with BaaS and charging and swapping networks, which is very competitive. From the sales perspective, its upper limit is much higher."  

Li Bin also said that NIO will continue to optimize its product cost structure and increase the proportion of high-margin models in the market in the next step. NIO's gross margin will continue to rise, and it is expected to reach a 15% gross margin level in the fourth quarter.

In addition, NIO's global market layout is accelerating. Li Bin revealed that NIO's official website in the United Arab Emirates was launched on August 20, and the products will be officially listed and delivered in the fourth quarter of this year.