Report guide
Founded in 2014, NIO Inc. Automobile, which focuses on the high-end electric car market, is a pioneer and leader in the industry. In April 2022, it became the first car company in China to produce 200,000 cars off the production line.
We believe that NIO Inc. is currently experiencing a product update and shift period of slowing sales growth and rapid growth of expenses. With the improvement of the product matrix and the subsequent climbing of production capacity, NIO Inc. is expected to complete the accelerated overtaking of sales. With the emergence of economies of scale, we expect NIO Inc. to turn losses into profits in 2024, with a 2021E/2022E/2023E EPS of-4.8 Mai 1.0 and 0.6 yuan. We give NIO Inc. 2023E2.5 times PS, corresponding to the target price of HK $184and give a buy rating for the first time.
Main points of investment
NIO Inc. is a pioneer and leader of domestic independent high-end electric brands NIO Inc. Automobile was founded in 2014, focusing on the high-end electric vehicle market, is a pioneer and leader in the industry.
In 2017, NIO Inc. 's first mass-produced model, the ES8, was a medium-and large-scale luxury SUV, with a starting price of 468000 yuan, and then occupied the high-end market of more than 300000 yuan through a price drop. The follow-up company will explore the product matrix to the middle and low-end Volkswagen models, but it is clear that its NIO Inc. brand will adhere to the high-end models of more than 300000 yuan, in order to maintain its high-end brand awareness and service quality, and the middle and low-end models will use the second and third brands to operate independently.
NIO Inc. is positioned at the high end, and the service system has become the benchmark in the industry.
NIO Inc. has established a good high-end brand tone by virtue of his first model EP9, which has refreshed the track record many times.
In 2017, NIO Inc. 's first mass-produced model, ES8, started at 468000 yuan, directly targeting BMW X5, Audi Q7 and Mercedes-Benz GLE, and then successfully pushed the product price down to 300000 yuan by virtue of its high-end brand awareness. NIO Inc. is committed to extending the service to the travel life of users, creating a lifestyle around NIO Inc. 's products and services. Through online NIO Inc. NIO app and offline NIO Inc. Center and NIO Inc. space to form an integrated online and offline user service community.
NIO Inc. is in the gear shift acceleration period, and the focus in the future will still be on sales growth. At present, NIO Inc. is in the shift period of new and old models and new and old platforms in the transition from old "ES8\ ES7\ ET7" to "ET5\ ES7\ ET7". A variety of unfavorable factors jointly lead to pressure on the company's profitability. The performance of the shift period is under pressure for the later sales expansion, and investors' focus should still return to sales growth. In the case of hot orders, capacity is the most important point of concern, we believe that NIO Inc. 's occasional supply chain problem is still one of the greater uncertainties in the operation.
Risk hint
Industry policy changes beyond expectations, production capacity and sales volume fall short of expectations, new brands fail to advance as expected, upstream supply chain shortage risk, negative public opinion risk.