- NIO’s trading performance in September saw the securities daily average value on SGX reach an eight-month high, the daily trading range expand fourfold, and the stock rally by 69%.
- NIO has provided strong guidance for its 3Q 2024 financial results, expecting record-high revenue between RMB 19.1 billion and RMB 19.7 billion.
- The newly launched ONVO L60 smart electric SUV is anticipated to boost EV deliveries in 4Q 2024, following a record 61,855 vehicles delivered in 3Q 2024.
NIO Inc (SGX:NIO), a Chinese electric vehicle (EV) manufacturer focusing on innovative technologies such as battery swapping, autonomous driving, and smart connectivity, showcased remarkable growth and performance in September 2024.
Management is also optimistic about NIO’s outlook, as seen from the strong guidance for its third quarter of 2024 (3Q 2024), indicating new record revenue, the launch of new models, and strategic investments.
September Performance Highlights
1. Record Vehicle Deliveries and New Brand Launch
In 3Q 2024, NIO delivered a record 61,855 vehicles, up 11.6% year-on-year (YoY). In September alone, NIO delivered 21,200 vehicles, a 35% YoY increase. NIO also began deliveries of its new mass-market EV brand, ONVO, marking its strategic expansion into lower-tier city markets.
2. Significant Price Rally Driven by Strategic Investment
According to SGX data, NIO saw a 69% month-on-month (MoM) price rally in September, driven by an announcement on a RMB 3.3 billion investment into its NIO China subsidiary from strategic investors. This investment boosted investor confidence and provided NIO with capital for growth and innovation, highlighting the market’s positive outlook on NIO’s future.
3. Increased Trading Activity and Volatility
NIO’s securities daily average value (SDAV) on SGX reached its highest level in eight months, soaring by 236% MoM to S$2.6 million, with institutional SDAV reaching a 2.5-year high. The daily trading range for NIO’s stock expanded fourfold to 87%, reflecting increased market volatility.
NIO Monthly SDAV & Trading Range
Source: SGX, Bloomberg
This heightened volatility was accompanied by a 32% narrowing of the bid-ask spread on SGX to 39 basis points, with the top-of-book size remaining steady at US$27,000. These metrics suggest a more active and liquid market for NIO’s shares, providing retail investors with ample trading opportunities.
NIO Bid-Ask Spread and Top-of-Book Size
Source: SGX, Bloomberg
Electrifying Prospects
1. Strong 3Q 2024 Guidance
Despite reporting an adjusted net loss of RMB 9.4 billion in the first half of 2024 (1H 2024) due to higher research and development costs, NIO provided strong guidance for 3Q 2024 financial results. The company expects record-high revenue in the range of RMB 19.1 billion to RMB 19.7 billion, a 0.2% to 3.2% YoY increase, driven by an expanded sales network and continued price segment expansion.
In the second quarter of 2024 (2Q 2024), NIO’s revenue reached RMB 17.4 billion, up by 99% YoY and 76% quarter-on-quarter (QoQ), supported by record EV shipments. The company’s vehicle profit margin (VPM) improved to 12.2% due to cost optimization and larger production scale.
2. Forecast Delivery Growth in 4Q 2024
Our research expects the already launched ONVO L60, a mid-size family smart electric SUV, to boost EV deliveries in the fourth quarter of 2024 (4Q 2024). NIO aims to produce up to 10,000 L60 units per month by the end of 2024, increasing to 20,000 units per month by 2025. The L60 is expected to achieve a VPM of 15% once full production capacity is reached. Additionally, NIO plans to launch a more affordable Firefly brand in Europe in early 2025.
Risks to Consider
While NIO’s future looks bright, potential risks include the European Union’s hefty tariffs on China-made vehicles by the end of October, higher EV battery costs, and stiffer competition in the EV market, which could impact NIO’s sales and VPM.
Disclaimer: ProsperUs Manager of Content Hailey Chung doesn’t own shares of any mentioned companies.
References
NIO Inc | CGS International Company Note | Sept 6, 2024
NIO Inc. Provides September and Third Quarter 2024 Delivery Update | NIO Inc.
NIO Announces RMB3.3 Billion Investment in NIO China from Strategic Investors | NIO Inc.
NIO Inc. Reports Unaudited Second Quarter 2024 Financial Results | NIO Inc.
