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Not afraid to go short and be favored by the investment bank, NIO Inc. (9866.HK/NIO.US) accelerated his return.

Gelonghui Finance ·  {{timeTz}}

6月29日晚,一份来自海外机构灰熊研究(Grizzly Research)的做空报告出炉,向不断升温的二级市场的浇了一盆冷水。

On the evening of June 29th, a short report from overseas institution grizzly Bear Research (Grizzly Research) was released, pouring cold water on the warming secondary market.


The target of this organization's sniper is NIO Inc., who is facing negative public opinion.$NIO Inc.-SW (09866.HK) $/$NIO Inc. (NIO.US) $In fact, the core charge of the 56-page report is that it inflates income and exaggerates profitability, while the focus of firepower is on the power exchange service system that NIO Inc. is proud of.

The short selling report is full of loopholes and has been "educated" by a number of international banks.


Although this caused no small waves to market sentiment, this seemingly ferocious report was actually full of loopholes, so it was not long before the obvious reversal was staged, with a number of major international banks collectively refuting and reiterating their optimism on NIO Inc..


In fact, not to mention those innocuous accusations, such as NIO Inc. 's weak sales, fast vehicle delivery cycle, Baidu, Inc. index showing NIO Inc. 's lack of heat, and so on, core doubts such as the transfer of capital investment in charging network construction off the balance sheet, the ability to oversell battery packs to related parties, and the confirmation of income in advance are in fact completely incapable of withstanding scrutiny in logic and the chain of evidence, and there is no value and necessity for too much discussion.


Here, the author only enumerates a few points, the market pays more attention to and discusses more accusations and counterattacks, to feel the confrontation between the two sides:


1) the capital investment in the construction of the charging network is transferred off the balance sheet, and the depreciation life of recharging infrastructure and equipment (including batteries) is expanded (from the previous 5 years to the most recent 5-8 years), thus further reducing the annual depreciation cost.


On the one hand, the expansion of the charging network involves administrative examination and approval of multiple sites and access to the power grid. NIO Inc. 's full self-construction is basically not realistic, and it is very reasonable to lease or introduce partners. It is not surprising that the capital investment is not in the statement, and it is normal that the relevant depreciation is not in the statement. To put it simply, even if there is no depreciation expense in the table, the probability will be reflected in other forms of expense.


In fact, many companies involved in heavy asset business have similar practices. For NIO Inc., this can not only reduce cash flow pressure and operational risk, but also focus more on light asset business in the nature of power exchange services.


With regard to the problem that the depreciation cost is reduced due to the lengthening of the service life, anyone with some common sense understands that extending the service life of the battery is the key breakthrough direction no matter from the development of technology or the needs of the market, and with the passage of time, the battery and related management systems are gradually improved, and the service life of the battery is indeed extending, which is also an indisputable fact.


2) oversold battery packs, thus exaggerating revenue or profitability. As of the end of September 2021, Viagra held more than 40,000 batteries, but there were only 19000 BaaS orders during the funding period of the recently issued Green Battery Asset support Note (ABN), the report said.


In this regard, Xiaomo, Daiwa Capital, Citigroup and other major banks agreed that the basic assets (19000) when Weineng issued ABN was only part of the total basic assets (more than 40, 000), and each battery held by Weineng had its corresponding basic users.


In fact, this is a typical confusion behavior, that is, Grizzlies misunderstand that the basic assets of ABN are equal to the total user size, confuse the ratio of battery inventory to users, and come to the misleading conclusion of oversold and oversold revenue.


At the same time, Citi further pointed out that NIO Inc. had 40, 000 BaaS users as of September 2021, which appears to be achievable given the 84000 sales of Q3 from 2020 to 2021 and the high BaaS subscription rate (currently close to 50%), but the report does not accurately reflect these details.


3) confirm revenue in advance: NIO Inc. transfers the burden of collecting monthly subscription fees to Suneng to accelerate revenue growth, which allows NIO Inc. to immediately recognize the revenue of the batteries they sell, rather than during the subscription period (about 7 years). The revenue that should have been gradually recognized during the subscription period (about 7 years) was confirmed immediately after NIO Inc. completed the sale of batteries to Weineng. Through this arrangement, we believe that NIO Inc. falsely increased his income seven years ahead of schedule.


Xiaomo believes that there are indeed similarities between OEM and auto finance. OEM records all income when selling cars to customers, while AFC (car-based assets / collateral) recognizes the monthly mortgage payments made by customers.


Fundamentally, the grizzly bear's accusation is based on a misunderstanding of NIO Inc. 's business model and power exchange model, and is even described by analysts as "brainless black" based on linear thinking.

June delivery volume "return", won a number of big banks long-term optimistic


Grizzly bears may not have expected that this trip would be so unfortunate. In addition to being collectively educated by international investment banks, grizzly bears were immediately hit in the face by NIO Inc. with his strength.


Just yesterday, the June delivery reports of a number of new energy car companies were released, of which NIO Inc. made a monthly high of about 13000 units, announcing a strong return. Among them, ET7 delivery volume reached 4349.


In this regard, NIO Inc. 's answer is: at present, the supply chain and vehicle production have been fully restored, and the delivery work in Shanghai and other places is on the right track. Next, NIO Inc. 's second production base, located in Xinqiao Intelligent Electric vehicle Industrial Park, will also be officially put into production in Q3.

看来,此次“交付回归”,说明供应链方面的担忧正在化解,其中ET7 的交付颇为强劲,在蔚来目前的四款交付车型中,其已占到月交付量的三分之一以上。

It seems that this "delivery return" shows that supply chain concerns are being resolved, of which ET7 delivery is quite strong, accounting for more than 1/3 of the monthly delivery of NIO Inc. 's current four delivery models.

与此同时,智能电动中大型SUV ES7以及搭载Alder·赤杨智能系统的ES8、ES6、EC6,以上车型预计将于8月开启交付。

At the same time, the delivery of medium and large SUV ES7 in smart electric and ES8, ES6 and EC6 equipped with Alder Chiyang intelligent system is expected to start in August.


This also means that the recovery of the supply chain and the intensive delivery of a number of new models in the second half of the year, helped by the stimulus of car consumption in many places, superimposed lower upstream commodity prices, which is expected to usher in a situation of "volume profit" rising.


In the second half of the new energy vehicle dominated by intelligence, the driving experience driven by high-end intelligent software and hardware configuration has become one of the core selling points. Whether it is the iteration of technology, or the rapid launch of new models with advanced technology, all rely on the underlying scientific and technological capabilities and the support of R & D and innovation platform. After years of accumulation, NIO Inc. has built a more comprehensive technical layout, from motor, electric control, battery package, to intelligent systems and other core components to build a relatively complete independent R & D system.


As the latest technology platform of NIO Inc., NT2.0 is equipped with more advanced technology and can realize more than 200 new functions. At present, three models have been launched based on this platform, including ES7, ET5 and ET7, which have entered the intensive launch period. With the technological upgrading and intensive delivery of new models, the competitiveness of NIO Inc. 's products will be further enhanced to ensure the determination and sustainability of future growth.


Based on the core technological innovation and the continuous improvement of infrastructure, NIO Inc. 's previous investment and layout has achieved remarkable results and has become a prerequisite for accelerating development. For NIO Inc. 's "future", the major investment banks are also optimistic, expect medium-and long-term sales will be rapid growth, that its fundamentals will continue to improve. Among them, China International Capital Corporation believes that, as a high-end intelligent electric leader, NIO Inc. reshapes the business model with excellent service, which is valuable and scarce. High-quality service and intelligent electric vehicle technology based on independent research will strengthen NIO Inc. 's competitive advantage.


At present, new energy is still booming, as long as there are sufficient performance support or signs of improvement, there is a high probability of regaining the favor of funds. Continue to be good to NIO Inc., so that the grizzly bear some "gray face", but scared out of the "pit", on the contrary, to create a favorable opportunity for investors to intervene.

This page is machine-translated. Futubull tries to improve but do not guarantee the accuracy and reliability of the translation, and will not be liable for any loss or damage caused by any inaccuracy or omission of the translation.

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