JPMorgan's research report points out that NIO (09866) has mixed performance in Q3 2024, with the vehicle profit margin slightly above the firm's forecasts and in line with market expectations, but the increase in operating expenses/marketing expenses (due to the launch of new products and channel expansion) and non-operating losses have dragged down net income data. Management remains optimistic during the earnings call and expects that sales will grow by over 100% in 2025 driven by new models. Furthermore, due to economies of scale and tactical reduction of incentive measures, profit margins or profitability are expected to improve accordingly.

The firm stated that NIO will launch at least four new models in 2025. The firm welcomes NIO's comprehensive plan for new model releases and expects the company's sales to reach 0.361 million vehicles in 2025. The firm also supports the management's cost reduction measures aimed at continuously improving the vehicle profit margin and has raised its net income forecast for 2025-2026 by 9-12%.

The firm has raised its net income forecast for 2025-2026 by 9-12%. The rating remains as 'shareholding' primarily due to: 1) High visibility of new model plans and reserved models entering 2025; and 2) Rapid improvement in cash situation, which is expected to alleviate investors' concerns about further financing or equity dilution risks. The target price for U.S. stocks is $7.