After half a year, NIO has secured a new round of strategic investment from Abu Dhabi investment firm CYVN.
On December 18th, NIO.US (09866. HK) announced the signing of a new round of share subscription agreement with Abu Dhabi investment firm CYVN Holdings (hereinafter referred to as "CYVN"). According to the agreement, CYVN will make a strategic investment of approximately $2.2 billion in cash to NIO through its subsidiary CYVN Investments, and subscribe to 294 million newly issued Class A common shares of NIO at a purchase price of $7.50 per share.
In July of this year, CYVN completed a strategic investment of approximately $1.1 billion through targeted issuance of new shares and transfer of old shares.
It is reported that CYVN is an investment institution held by the Abu Dhabi government, focusing on strategic investment and layout in the advanced and intelligent mobile transportation field, and committed to collaborating with industry leaders in this field worldwide.
It is worth noting that CYVN not only brings funds to NIO, but also helps it expand its international business. NIO announced in June that it has reached a cooperation agreement with investors and will jointly seek opportunities for NIO to develop its international business after the investment transaction ends. In its announcement on December 18th, NIO reiterated that after the completion of this investment, NIO and CYVN will continue to carry out strategic and technological cooperation in the international market.
Li Bin, founder, chairman, and CEO of NIO, said, "With the strengthening of its balance sheet, NIO is fully prepared to cope with the increasingly fierce competitive landscape. While strengthening its brand positioning, enhancing sales and service capabilities, and investing in core technologies for the long term, NIO continues to improve its execution efficiency and systematic capabilities."
Jassem Al Zaabi, Chairman and Managing Director of CYVN, stated that CYVN will support NIO's unremitting efforts in product innovation, technological breakthroughs, and international market expansion.
After experiencing a period of downturn and transformation, a turning point has emerged for NIO's performance to improve.
Since the beginning of this year, Li Bin has repeatedly emphasized that NIO has recently completed a comprehensive planning of the company's two-year operational plan to determine key goals, priorities, and action plans, and has identified opportunities for organizational optimization, cost reduction, and efficiency improvement. Next, NIO will continue to focus on advancing core technologies, developing key products, and enhancing sales and service capabilities.
The 2023 third quarter financial report released on December 5th showed that NIO's revenue in the third quarter was 19.07 billion yuan, a month on month increase of 117.4% and a year-on-year increase of 46.6%, setting a new historical high; The net loss was 4.567 billion yuan, an increase of 10.8% year-on-year and a decrease of 24.8% month on month; The gross profit margin of the whole vehicle has significantly increased to 11% month on month, returning to double digits.
In the cold winter of capital, NIO has successfully raised funds multiple times. In addition to CYVN's investment, NIO also successfully issued a total of $1.15 billion in convertible senior bonds in September and October this year. The financial report shows that as of the end of the third quarter, NIO's cash reserves were 45.2 billion yuan, an increase of 13.7 billion yuan from the previous quarter.
In terms of delivery volume, NIO delivered 55400 vehicles in the third quarter, a month on month increase of 135.7% and a year-on-year increase of 75.4%, also reaching a historic high. NIO stated that due to the decrease in component costs, lithium prices, and improved efficiency, it is expected that the gross profit margin of the entire vehicle will reach 15% -18% in the fourth quarter.
Affected by this news, NIO's stock price rose more than 11% before trading. As of press release, NIO's stock price rose 10.78% to $8.84 per share.