Revenue was in line with expectations and gross profit performance was lower than expected. The company's 3Q22 achieved revenue of 13 billion yuan (HTI expected 13.21 billion yuan), year-on-year + 32.6%, month-on-month + 26.3%; gross profit margin 13.3% (HTI expected 16.3%), year-on-year-7.0pcts, month-on-month + 0.3pcts, gross profit margin continued to be under pressure due to high battery prices. Among them, automobile sales revenue is 11.93 billion yuan, year-on-year + 38.2%, month-on-month + 24.7%; vehicle gross profit margin is 16.4%, year-on-year-1.6pct, month-on-0.3pcts. The net loss of 3Q22 was 4.11 billion yuan, which was + 392.1% compared with the same period last year and + 49.1% compared with the previous year. By the end of the third quarter, NIO Inc. had a cash reserve of 51.4 billion yuan, a decrease of 3 billion yuan from the previous month.
The investment in R & D has been increased and the operating efficiency has been improved. The company's 3Q22 operating expenses were 5.61 billion yuan, and the cost rate increased by 2.4pcts to 43.1% compared with the previous month. Of this total, R & D expenditure was 2.94 billion yuan, + 146.8% compared with the same period last year, and + 37.0% compared with the previous year. According to the results will be disclosed, the company's R & D model is basically stereotyped, the future single-quarter R & D expenditure will be stable at about 3 billion yuan. SG&A fee is 2.71 billion yuan, year-on-year + 48.6%, month-on-month + 18.8%, the same increase is mainly due to the increase in domestic marketing activities and European listing promotion, but in terms of the expense rate, the SG&An expense rate decreased to 20.9% month-on-month in the third quarter, and the operating efficiency improved steadily.
Q4 delivery guidance is weaker than expected and high lithium gross margins continue to be under pressure. The company estimates that the delivery volume of 4Q22 new cars is 43,000 to 48,000, compared with the same period last year, + 72% to 92%, month to month + 36% to 52%, and total revenue to 173.7 to 19.23 billion yuan, year on year + 75% to 94%, month to month + 34% to 48%. According to the results, October delivery is mainly limited by the climbing of the EDS production line, the supply of subframes and the epidemic situation in Hefei, which have been improved. According to the company's capacity climbing forecast, the total production capacity in December is expected to exceed 20,000 units per month, supporting the accelerated release of ET5 revenue contribution. From the cost point of view, according to Baichuan Yingfu data, the price of lithium carbonate has climbed rapidly since September, reaching a record high of 585000 / ton as of November 10. Higher battery costs and superimposed ET5 have brought about changes in product structure, and we expect Q4 gross profit margin to continue to be under pressure.
The pace of the new product continues and is optimistic about sales growth next year. According to the results, the company will launch five new cars (sedans and SUV; specific models or revamped for 866 and two new models) in the first half of next year, releasing the advantages of the NT2.0 platform, including an entry-level luxury SUV standard Model Y, which is expected to continue the popularity of ET5. In terms of capacity climbing, the company currently has stable supply chain management and a high degree of automation in the new factory. It is expected that F1 and F2 plants will form a total annual production capacity of 300000 units per shift next year, fully supporting sales growth.
Profit forecast and investment rating. In view of the low Q4 delivery guidelines, we downgrade the company's annual delivery forecast of 13000 to 129000 vehicles. The total revenue of the company in 2022-2024 is 515.7x1164.5 and EPS is-8.11 and 5.680.11 respectively. With reference to the valuation level of the leading new power of car building at home and abroad, 1.0x EV/Sales in 2023 is given, corresponding to a target price of HK $98.14m (corresponding to 1.3x PS in 2023, which is at a reasonable level; HK$1 = Rmb0.9210; previous target price of HK $152.10, corresponding to 3.5x EV/Sales in 2022). Maintain the "better than the market" rating.
Risk hint. The price of raw materials has risen sharply, the shortage of the supply chain cannot be alleviated, and the lower-than-expected production capacity is caused by the lower-than-expected production capacity under construction.