American depository receipts from Nio Inc. plunged further into a bear market on Tuesday, but Wall Street focused on the Chinese electric carmaker’s “impressive” hopes for its first quarter sales.
Nio NIO,
Last Monday reported a 133% jump in fourth quarter revenue and a larger-than-expected loss. ADRs traded for as low as $ 44.82 on Tuesday and have recently dropped about 26% from February’s high closing record of $ 62.84 on February 9, placing them in bear market territory.
Nio’s shares are 5% in the red this year, but have gained 1,045% in the last 12 months, compared to advances of around 3.6% and 26% for the S&P 500 SPX index,
so far this year and in the past 12 months. Nio hit a 52-week low of $ 2.37 on March 23, 2020.
Edison Yu with Deutsche Bank highlighted Nio’s “impressive” guidance for the first quarter, which required the delivery of about 20,000 to 20,500 vehicles, an increase of between 15% and 18% over fourth quarter deliveries. He directed revenue between $ 1.13 billion and $ 1.16 billion for the quarter.
Delivery expectations outline “a very real path to (more than 100,000) deliveries this year, he said.
“We believe this reflects the growing recognition and appreciation of its aspirational brand and ecosystem, putting NIO on the right track to be a market leader in China’s premium segment,” said Yu.
The goal of delivering 100,000 is “achievable,” he added.
Dan Ives of Wedbush said that Nio’s “robust” fourth quarter results “show a transformative EV opportunity happening in China”. The EV maker has “massive tailwinds in 2021 as the golden age of EVs settles in with Tesla, Nio, Xpeng XPEV,
Li Auto LI,
and others leading this Chinese market opportunity. “
Ives said the first quarter’s delivery guidance was a positive forecast for overall demand for the year. Headwinds include the continuing impact of chip shortages on global automotive markets and the recent price cuts by Tesla Inc.
“The Chinese EV market is set to go from 4.5% to 10% penetration in the next 2 years based on our predictions, as the consumer’s appetite for EV vehicles is jaw-dropping and will benefit domestic suppliers as well. positioned, as well as foreign players (Tesla TSLA,
Ford F,
GM GM,
etc.), ”said Ives.