Company announcement: NIO's 2023Q4 revenue was 17.10 billion yuan, +6.5%/-10.3% year-on-month.
Of this, vehicle sales revenue was 15.44 billion yuan, +4.6%/-11.3% year-on-month. Q4 gross margin was 7.5%, -3.6/-0.5pct month-on-month, respectively; gross margin of vehicle sales was 11.9%, +5.1/+0.9pct, respectively. 2023Q4 operating loss was $6.63 billion, and adjusted net loss (non-GAAP) was $4.8 billion ($-3.95 billion for 23Q3 and $50.7 billion for 22Q4).
As of December 31, 2023, the company's cash and cash equivalents, restricted cash, short-term investments and long-term time deposits were $57.3 billion (45.2 billion yuan at the end of 2023Q3).
Q4 Performance was in line with expectations. 1) Revenue: The main reason for the month-on-month decline in revenue was a decline in delivery volume and an increase in the share of low-priced models. The 2023Q4 company delivered a total of 50,000 vehicles, +25.0%/-9.7% year-on-month. Judging from the sales structure, the lowest-priced ET5+ET5T accounted for 30.4% of sales, accounting for an increase of 0.2 pct month-on-month; the most expensive ES8 sales accounted for 11.0% of sales, accounting for a decrease of 0.6 pct month-on-month. The company's average bicycle revenue fell to 308,500 yuan month-on-month, -16.81%/+2.81% month-on-month respectively. The company expects delivery volume of 31-33,000 vehicles in 24Q1, -0.1% to +6.3% year-on-year. 2) Gross profit margin: The main reason for the month-on-month decline in gross margin was the decline in gross margin for providing energy solutions due to the expansion of the energy network; the main reason for the month-on-month increase in gross margin of vehicle sales was a decrease in material costs. 3) Cost ratio: Q4 R&D expenses were 3.97 billion yuan, -0.2%/+30.7% YoY; R&D expenses were 23.2%, -1.6/+7.3pct; SG&A expenses were 3.97 billion yuan, +12.6%/+10.1% YoY, and the cost ratio was 23.2%, +1.3/+4.3pct, respectively. The main reason for the month-on-month increase in SG&A expenses is an increase in personnel costs for the sales function+an increase in sales and marketing activities (nio days). In terms of channel layout, as of the end of December, NIO had a total of 145 NIO centers +335 NIO spaces, compared to 23Q3 +3 NIO centers/+9 NIO spaces. 3) Under the influence of the above combined factors, the company's 2023Q4 operating loss was -6.63 billion yuan, bicycle loss was 132,000 yuan, and adjusted net loss (non-GAAP) was -4.8 billion yuan, which increased sequentially.
Profit forecast and investment rating: The company expects to promote NOP+ urban navigation assistance to all NT2.0 users in Q2. At the same time, ALPS is expected to begin delivery in Q4. NT2 platform models will continue to be released and new brands will be launched, and sales are expected to continue to increase. However, due to increased market competition, we lowered the company's net profit forecast for 2024-2025 to -131.72/-2113 billion yuan (originally -121.33/ -1,372 billion yuan), and we forecast the company's net profit attributable to common shareholders of $1,731 billion in 2026. In view of the comprehensive layout of the company's core technology and the barriers created by circle marketing, we still maintain a “buy” rating.
Risk warning: New car sales fell short of expectations, and the iteration progress and results of advanced intelligent driving functions fell short of expectations; the industry's price war performance exceeded expectations.