JPMorgan issued a research report stating that Nio-SW (09866.HK)’s fourth-quarter results for last year were largely in line with expectations, with no major surprises, as the company had already announced preliminary operating profit figures in February, which beat market expectations.
Despite weak demand and rising costs presenting industry headwinds in the first quarter of 2026, Nio's management guidance for 2026 sales growth (40% to 50%, compared to the firm’s estimate of approximately 30%) and full-year non-GAAP profitability was still considered a positive surprise relative to both the firm’s and market expectations. In the firm’s earnings preview last week, it highlighted that Nio and XPeng Motors would likely experience a notable share price rebound before the Beijing Auto Show in April. Clearly, Nio’s initial share price reaction yesterday (the 10th) during U.S. trading hours indicated investors are looking beyond the earnings trough expected in the first quarter of 2026.
In terms of performance, Nio’s revenue in the fourth quarter of last year increased by 76% year-over-year, primarily driven by a 72% growth in sales volume. The firm forecasts that Nio’s sales volume will grow by 30% year-over-year in 2026, with five large SUV models under the Nio and Lodo brands being key contributors to total sales. Vehicle gross margin improved from 15% in Q3 2025 to 18%, while overall gross margin also rose from 14% to 18%. Operating expense ratio declined to around 16%, benefiting from effective cost control and reduced marketing activities during the period. Overall, Nio recorded a net profit of approximately RMB 300 million for the quarter, with non-GAAP net profit reaching RMB 700 million.
JPMorgan maintains an “Overweight” rating for Nio (NIO.US) shares listed in the U.S., with a target price of $7.
