降本持续兑现，汽车业务毛利率环比提升。公司3Q 合计交付61,023 辆，继续创历史交付最好水平。在供应链降本及规模效应提升共同带动下，汽车业务毛利率环比增长至13.1%，此外其他业务毛利率为-8.8%，亏损同环比均大幅收窄，主因公司售后和充电站业务效率持续提升。向前展望，我们预计综合毛利率有望稳中有升，其中公司聚焦盈利，带动汽车业务毛利率有望回升至15%，其他业务方面，公司规划保持前置投入换电基础设施，以支持乐道等新车型销售。费用端，3Q 研发及销管费用分别为33.2/41.1 亿元，环比分别+3.1%/9.4%。3Q Non-GAAP 净亏损44.1 亿元，亏损环比继续收窄。3Q24 results are basically in line with market expectations
The company announced 3Q24 results: revenue of 18.67 billion yuan. Driven by the reduction in supply chain costs and increased scale effects, the gross margin of the automobile business increased to 13.1% month-on-month, and the non-GAAP net loss was 4.41 billion yuan. Losses narrowed month-on-month. The 4Q sales guidelines were steady, and the overall performance was in line with expectations.
Development trends
Cost reductions continued to be realized, and gross margin of the automobile business increased month-on-month. The company delivered a total of 61,023 vehicles in 3Q, continuing to achieve the highest level of delivery in history. Driven by cost reduction in the supply chain and increased scale effect, the gross margin of the automobile business increased to 13.1% month-on-month. In addition, the gross margin of other businesses was -8.8%, and losses narrowed sharply year-on-month, mainly due to the continuous improvement in the company's after-sales and charging station business efficiency. Looking ahead, we expect the overall gross margin to rise steadily. Among them, the company's focus on profit is expected to drive the gross margin of the automobile business back to 15%. In other business areas, the company plans to maintain forward investment in electricity exchange infrastructure to support sales of new models such as the Ledao. On the cost side, 3Q R&D and marketing management costs were 3.32/4.11 billion yuan, respectively, +3.1%/9.4% month-on-month. The 3Q non-GAAP net loss was 4.41 billion yuan, and losses continued to narrow month-on-month.
Production capacity bottlenecks were gradually solved, and the Ledao channel expanded rapidly, and a stronger product cycle was ushered in 25 years. The company's 4Q24 sales guide reached a record high of 0.072-0.075 million vehicles. Driven by rising production capacity, Ledao is expected to deliver more than 10,000 vehicles in December, then have a monthly delivery capacity of 0.02 million vehicles. Currently, there are plenty of orders for Ledao models. The company revealed that only about 2% of Ledao potential customers come from the NIO brand, which has achieved good brand differentiation through price and configuration. Channel expansion and the launch of new models are expected to support Ledao's sales growth. As of 3Q, the company had a cumulative total of more than 191 ONVO brand stores and plans to reach 300 by the end of the year; the company plans to launch 2 new family SUV models by the middle of next year. We expect the Ledao L60 to become a new growth engine for the company, driving another improvement in overall operating efficiency. Furthermore, looking ahead to 2025, the company is expected to usher in a stronger product cycle. The company plans include the NIO ET9, the first Firefly model, and the facelift of existing models, which are expected to be delivered one after another.
The focus was on profit, and free cash flow was corrected in 3Q. 3Q24 free cash flow was officially corrected. Cash on hand reached 40 billion yuan. The company's balanced pricing strategy focused on improving profit and operating efficiency. Since October, NIO brand terminal promotions have been recovered. Steady sales and high gross margins have supported the improvement of operating cash flow, compounded with controllable capital expenses to help the company maintain a relatively healthy level of cash. Looking ahead to 2025, along with sales growth and further cost reduction, the company's guidance in this performance meeting is that the gross margin of NIO and LEDAO is expected to gradually reach 15%/20%, respectively, thus continuing to narrow overall losses.
Profit forecasting and valuation
The current US and Hong Kong stock prices correspond to 1.0x EV/REV in 2024, maintaining 2024/25 non-GAAP net profit and maintaining an outperforming industry rating. Maintaining the target price of HK$5/$7 for Hong Kong and US stocks, all corresponding to 1.5x EV/REV in 2024. Hong Kong stocks and US stocks have 48%/51% upward space compared to current stock prices, respectively.
risks
Demand fell short of expectations due to increased competition in the market, and cost control and power exchange cooperation fell short of expectations.
