American depository receipts for shares of Nio Inc. went deeper into a bear market on Tuesday, but Wall Street focused on the Chinese electric car maker’s “impressive” expectations for first-quarter sales.
Nio NIO,
Monday reported late Monday an increase of 133% in sales in the fourth quarter and a larger than expected loss. The ADRs traded as low as $ 44.82 on Tuesday and had recently fallen about 26% from its February 9 high at $ 62.84, putting them well into bear market territory.
Nio shares are 5% in the red this year, but are up 1.045% in the last 12 months, compared to advances of around 3.6% and 26% for the S&P 500 index SPX,
so far this year and in the past 12 months. Nio hit a 52-week low of $ 2.37 on March 23, 2020.
Deutsche Bank’s Edison Yu highlighted Nio’s “impressive” outlook for the first quarter, which required deliveries of approximately 20,000 to 20,500 vehicles, an increase of between 15% and 18% over Q4 deliveries. It led to sales between $ 1.13 billion and $ 1.16 billion for the quarter.
The delivery expectations outline “a very real path to (more than 100,000) deliveries this year,” he said.
“We believe this is a reflection of the growing awareness and appreciation of its ambitious brand and ecosystem, driving NIO on its way to becoming a market leader in China’s premium segment,” said Yu.
The goal to deliver 100,000 is “achievable,” he added.
Wedbush’s Dan Ives said Nio’s “robust” fourth quarter results “speak of a transformational EV opportunity unfolding in China.” The EV maker has “huge tailwind in 2021 as the golden age of EVs begins with Tesla, Nio, Xpeng XPEV,
Li Auto LI,
and others in charge of this Chinese market opportunity. “
Ives said the first quarter delivery guidelines were a positive outlook for overall demand for the year. Headwinds include the ongoing impact of chip shortages on global automotive markets and Tesla Inc.’s recent price cuts.
“The Chinese EV market, based on our forecasts, will go from 4.5% penetration to 10% in the next 2 years over the next 2 years as consumer interest in EV vehicles is overwhelming across the board and this is not the case. good will come to well-positioned domestic sellers and foreign players (Tesla TSLA,
Ford F,
GM GM,
etc.), ”said Ives.