EV Maker Nio Q3 Earnings Preview

  • NIO.us
    (${instrument.percentChange}%)

NIO INC

NIO Inc. is a Chinese firm that designs, jointly manufactures and sells electric vehicles (EVs) in a market that is rapidly growing and dominated by Tesla. The first model it developed was the EP9 supercar, introduced in 2016, while its first volume manufactured electric vehicle – the ES8 – was launched in December 2017. [1]

It currently has four models in its line-up, including the ET7, which was launched in January of 2021 and is expected to be delivered next year, along with more models [2]. On September 30, the firm opened its NIO House and completed its first batch of vehicle deliveries in Norway [3], making its entry into the European market.

Q3 EARNINGS AND DELIVERIES

Nio announces its financial results for the third quarter of 2021 on Tuesday November 9, after US markets close.

It comes from a solid Q2, having generated Revenue of RMB 8.448 billion (then US$ 1.308 billion) and for the now reported period it had projected Revenue between RMB 8,913.0 million and RMB 9,631.1 million, which would constitute a 96.9% -112.8% y/y rise. [2]

The firm had already announced record 24,439 deliveries for Q3 [3], but the latest update for the month of October was rather disappointing. It registered a 27.5% y/y decrease in deliveries, due reduced production volumes, attributed to restructuring and upgrades of manufacturing lines and certain supply chain volatilities. [4]

On Tuesday, investors will also be looking at Gross Profits and Margins and updated forward guidance on Revenue and Deliveries.

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STOCK MOVEMENT

NIO.us had a poor third quarter with losses in excess of 30%, but has staged a recovery during the new quarter. Last week was profitable and a solid open today is likely, in tandem with NAS100 which trades with positive undertone– albeit off Friday's highs.

Such a scenario could lead to new month highs (current 44.06) and give the stock a chance to look again towards the 46.00-84 area, but conquering it, would probably require a positive reaction to tomorrow's earnings.

On the other hand, NIO.us is susceptible to another test of its EMA100 (at around 40.00)on the downside, although a bigger drop to fresh November lows (37.89) has a higher degree of difficulty at this point.

In any case, caution is warranted as the earnings results are likely to determine the stocks next move and have the potential to increase volatility, with the prior report having driven the stock lower.


Past Performance: Past Performance is not an indicator of future results.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 08 Nov 2021 https://ir.nio.com/governance/company-profile

2

Retrieved 08 Nov 2021 https://ir.nio.com/static-files/4fe3fe59-3eb1-4b0a-a945-65d4fbbcfe4b

3

Retrieved 08 Nov 2021 https://ir.nio.com/news-events/news-releases/news-release-details/nio-inc-provides-september-and-third-quarter-2021

4

Retrieved 08 Nov 2021 https://ir.nio.com/news-events/news-releases/news-release-details/nio-inc-provides-october-2021-delivery-update

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