With the quarterly improvement in sales volume and narrowing of promotions, Bocom Intl believes that Nio Inc has reached a turning point and that the gross margin of autos will further improve in the third quarter.
The Intelligent Finance and Economics APP learned that Bocom Intl has released a research report stating that it has given a 'buy' rating to Nio Inc-SW(09866), and with mass deliveries of the Le Dao starting in the fourth quarter, it believes that there is still room for improvement in the gross margin of autos, with a target price of HKD 59.88 for H shares.
The company's second quarter revenue was 17.5 billion RMB, a year-on-year increase of 98.9%, and a quarterly increase of 76.1%. The gross margin of autos was 12.2%, higher than the bank's expected range of 10% to 11%, mainly due to the renegotiation of procurement contracts with suppliers in the second quarter, which led to a decrease in unit costs, while discounts and promotions have slightly narrowed. With the quarterly improvement in sales volume and narrowing of promotions, the bank believes that Nio Inc has reached a turning point and that the gross margin of autos will further improve in the third quarter.