Operating income increased by 27% compared with the same period last year, and the increase in fees affected short-term profits. In the first three quarters of 2022, the company achieved sales revenue of 33.2 billion yuan, an increase of 27% over the same period last year, and net profit of-8.7 billion yuan (- 8.4 billion yuan in the same period last year).
In the third quarter alone, the company achieved sales revenue of 13 billion yuan, an increase of 33% over the same period last year and 26% month-on-month growth; net profit was-4.1 billion yuan (the same period last year-2.9 billion yuan, and the second quarter of this year-2.7 billion yuan). At the end of the second quarter, the old "866" model was upgraded and updated, and the delivery of new models ES7 and ET5 began in the third quarter, and the strong product cycle began, helping the company to improve sales and increase sales revenue. However, the increase in the price of raw materials and the related expenses of R & D and operation have affected the company's net profit.
Multiple factors affect short-term gross profit margin and increase investment in R & D and marketing. In the first three quarters of 2022, the company's gross profit margin was 14%, down 6% from the same period last year; the net profit rate was-26%, down 19% from the same period last year; and the R & D expense rate / sales, administrative and general expense rates were 21%, 21%, respectively, an increase of 10% compared with the same period last year. In the third quarter alone, the company achieved a gross profit margin of 13%, down 7% from the same period last year and 0% from the same period last year; the net profit rate was-32%, down 23% from the same period last year and 5% from the previous year; the R & D expense rate / sales, administrative and general expense rates were 23% and 21% respectively, which increased by 10% and 2% respectively compared with the same period last year. The year-on-year decline in gross profit margin in the third quarter was mainly due to lower gross profit margins on car sales as a result of higher raw material prices, expanded investment in energy and service networks, and reduced revenue from new energy credits. The increase is mainly due to the expansion of the sales and service network, increased promotional activities in the Chinese and European markets, and investment in research and development of new brands, batteries and chips.
Alder intelligent system helps upgrade products, and new models start a strong cycle. In the first three quarters of 2022, NIO Inc. delivered 80,000 vehicles, an increase of 24% over the same period last year. The delivery of 2022 ES8, ES6 and EC6 with Alder intelligent system has been started, and the delivery of new models based on NT2.0 platform such as ET5 (September), ES7 (August) and ET7 (March) has also been launched one after another, and it is expected to release new affordable brands and expand customer coverage.
The forward-looking layout of the energy supplement system, NIO series of services to create a high-end ecological circle. NIO Power is a power-up solution based on the mobile Internet. As of August 31, 2022, NIO Inc. had deployed 1091 switching stations, 991 overcharging stations and 5317 overcharging piles. NIO Service mainly includes car owners' rights and interests, service worry-free, insurance and other meticulous services covering the whole life cycle. NIO Life is around NIO Inc. 's original brand, and NIO Certified is an official used car trading service provided by NIO Inc..
Risk tips: chip supply is tight; raw material prices are rising; sales of new models are not as expected.
Investment advice: downgrade profit forecast and maintain "overweight" rating
We downgrade our profit forecast. It is estimated that the company's sales revenue in 2024 will be $500,907 billion (originally $1502 billion), and its net profit will be $- 102 million ($- 73 million), corresponding to PS times that of 3-1-1, maintaining the "overweight" rating.