© Reuters NIO Inc. (NIO) Monthly Volume to ‘Continuously Improve’ – HSCB
By Sam Boughedda
HSBC analyst Yuqian Ding reiterated a Buy on Chinese electric vehicle company Nio Inc (NYSE:) on Thursday, raising the firm’s price target on the stock to $28 per share from $26.
In a research note, Ding told investors that monthly volumes should improve on ramp-ups of new models and demand and supply chain recovery.
NIO’s price target recently fell after a short report from Grizzly Research arguing the company is exaggerating revenue and profit margins. NIO shares are currently down 32.6% in 2022.
Ding said: “NIO’s US share price has rebounded 6% since end-March (vs the down 16% during the same period), mainly on the back of the momentum seen in NIO’s sales volume recovery (May sales were +38% m-o-m and +5% y-o-y, per company data), in line with our expectation. Looking forward, we expect its monthly volume to continuously improve from ramp-ups of three new models (ET7/ES7/ET5) in 2H22e and more new models expected to launch after 2022e.”
However, the analyst acknowledged that the battery cost headwind is “likely to weigh on profits over the near term” into the second quarter, with NIO’s selling price hike not “reflected in revenue until 3Q22e.”