US deposit receipts from Nio Inc. they headed deeper into a bear market on Tuesday, but Wall Street focused on the Chinese electric car maker’s “impressive” expectations for its first-quarter sales.
Nio NIO,
on Monday afternoon it recorded a 133% jump in fourth-quarter revenue and a broader-than-expected loss. ADRs traded up $ 44.82 on Tuesday and recently fell about 26% from their Feb. 9 record close of $ 62.84, placing them as far as bearish territory.
Nio shares are up 5% in the red this year, but have gained 1.045% in the last twelve months, compared with gains of around 3.6% and 26% for the S&P 500 SPX index,
so far this year and in the last twelve months. Nio hit a 52-week low of $ 2.37 on March 23, 2020.
Edison Yu with Deutsche Bank highlighted Nio’s “impressive” first-quarter guidance, which called for the delivery of about 20,000 to 20,500 vehicles, an increase of between 15% and 18% over fourth-quarter deliveries. It targeted revenue between $ 1.13 billion and $ 1.16 billion for the quarter.
Delivery expectations outline “a very real path up to (more than 100,000) deliveries this year,” he said.
“We believe this reflects the growing awareness and appreciation of its aspirational brand and ecosystem, putting NIO on track to become a market leader in China’s premium segment,” Yu said.
The goal of delivering 100,000 is “achievable,” he added.
Wedbush’s Dan Ives said Nio’s “robust” fourth-quarter results “speak of an opportunity to transform VE into China.” The electric vehicle manufacturer has “massive tail winds until 2021 as the golden age of electric vehicles takes advantage of Tesla, Nio, Xpeng XPEV,
Li Auto LI,
and others leading the charge in this opportunity of the Chinese market. “
Ives said the first-quarter delivery orientation was a positive preview of global demand for the year. Headwinds include the continued impact of chip shortages in global car markets and recent Tesla Inc. price cuts.
“The Chinese electric vehicle market will go from 4.5% penetration to 10% in the next 2 years according to our forecasts, as the appetite of the consumer of electric vehicles in general decreases and will benefit domestic sellers and well-positioned foreign players (Tesla TSLA,
Ford F,
GM GM,
etc.), ”Ives said.