Do you dare to 'bargain' for NIO's stocks
In April of this year, a blogger made such a statement that NIO's stock price fluctuated repeatedly from April to August, with the lowest reaching around $3.6.
The turning point of the matter occurred on September 5th, when NIO released its second quarter financial report.
On September 5th, NIO released its Q2 2024 financial report. NIO's performance in both revenue and sales reached a new high in the second quarter: revenue reached 17.45 billion yuan, a year-on-year increase of 98.9% and a month on month increase of 76.1%; The sales volume was 57400 units, a year-on-year increase of 143.9% and a month on month increase of 90.9%; The gross profit margin of the entire vehicle was 12.2%, an increase of 6 percentage points year-on-year and 3 percentage points month on month; The year-on-year loss narrowed significantly by 16.7%.
After the release of the second quarter financial report, several well-known domestic and foreign investment banks affirmed NIO's "upward rating", and NIO's stock price directly began to rise, with the US stock rising by 57.5% at one point. Although the stock price has recently fallen with the overall market, it is still much higher than this year's lowest price.
This is not simply a data fluctuation, but a signal that NIO may have entered a new era. Revenue has increased significantly, while losses have decreased. If this trend continues, future profits are expected.
With the support of NIO's basic market, Ledao's explosive orders undoubtedly further strengthen the confidence of the capital market: NIO's expected large-scale sales can be achieved, and it also verifies NIO's 50 billion yuan R&D investment in innovative technology, which has a certain return.
More favorable news also followed one after another: NIO brand sold over 20000 units for five consecutive months; Shareholders with state-owned assets have increased their capital by 3.3 billion yuan to NIO China; Abu Dhabi shareholders CYVN and NIO have opened up deeper cooperation; NIO also announced its official entry into the Middle East and North Africa markets
Ledao's explosive orders open up the household car market
The orders have exploded, and the server for Ledao's orders has been expanded fivefold. We will start working overtime for production immediately
On the evening of September 19th, after the launch of the Ledao L60, NIO founder Li Bin couldn't hide his excitement during the live broadcast. Ledao CEO Ai Tiecheng, who was also live streaming with him, although exhausted, was equally excited and even choked up when speaking.
It is reported that in the first three days before its release, the orders for this car exceeded 30000; Since the nationwide delivery began on September 28th, 832 units have been delivered in just two days by the end of the month. Some netizens joked, 'Li Bin has never fought such a wealthy battle.'.
Industry insiders have stated that the explosive sales of Ledao are not surprising, as consumers are more price sensitive in the mainstream family car market.
When Ai Tiecheng announced at the L60 press conference that the LeDao L60 adopts the BaaS (rental battery solution) with a starting price of 149900 yuan, cheers erupted at the scene. Everyone knew the competitiveness of the LeDao L60's configuration in the household car field above 150000 yuan according to the above pricing strategy.
Industry insiders have analyzed that there are many reasons for Ledao's explosive orders. The capabilities of technology and products are beyond doubt, and another important factor is that NIO's "vehicle electric separation" model has brought about a "misalignment competition" effect, allowing the Leyte L60 with a quality level of 200000 to be purchased for only 149900 yuan through the BaaS model.
In addition, through the "car electric separation", NIO users use batteries in a "rental" manner, regularly paying rental and service fees, and can exchange a healthy battery in just 3 minutes without worrying about battery health and lifespan.
A senior practitioner in the automotive industry commented: Previously, NIO brand used BaaS to engage in "differentiated competition" in the high-end market, but now the Ledao L60 directly brings "differentiated competition" to the household car market.
With the official launch and delivery of L60, NIO has officially entered the era of multi brand and started multi brand operations.
Multi brand strategy is the first choice for many mainstream car companies, especially for brands that focus on globalization and scale, such as BMW and MINI, Toyota and Lexus, because multi brands are based on different concepts, products, and service positioning, which can meet different user needs in different price ranges and segmented markets.
At present, NIO's launch of its second brand, Ledao, is actually based on Li Bin's judgment of strategic rhythm.
At present, although NIO brand has firmly occupied the top spot in China's high-end pure electric market with a sales volume of over 300000 yuan, even surpassing BBA electric cars, the current situation of the high-end pure electric market is limited in total plate and narrow audience. From a strategic development perspective, how to seize the opportunity of the rapid breakthrough in the penetration rate of new energy to obtain a larger cake and enter the "mass market" with a wider market space is undoubtedly an excellent choice.
Based on the performance of Ledao, it can be seen that with the implementation of the multi brand strategy, NIO's accumulated technological dividends can be quickly released through scaling, accelerating the positive business cycle, and making NIO's strategic layout clear and recognized by the outside world. Therefore, NIO's overall business situation has ushered in a true "moment of qualitative change".
Some media even commented that 'Li Bin is a rhythm master who can accurately grasp strategic direction and timing'.
The latest news shows that NIO's third brand Firefly (codename) will be released at NIO Day in Guangzhou in December this year. Next, with the joint operation of the three brands, NIO is likely to continue to increase its volume.
The foundation laid by 50 billion
In July this year, in a program of CCTV CCTV News, Weilai Technology was called "core and soul", making China's smart electric vehicles more valuable.
On the "NIO IN 2024 NIO Innovation and Technology Day" held on July 27th, NIO announced the successful chip fabrication of its self-developed world's first 5-nanometer intelligent driving chip, the Shenji NX9031. At the same time, NIO officially released the full range of SkyOS, a vehicle wide operating system developed over four years, which has changed the situation of "chip shortage and soul shortage" in Chinese automobiles.
On that day, NIO also released the NIO World Model, intelligent system Banyan 3, and intelligent driving technology architecture NADArch 2.0, providing users with a more intelligent and convenient driving experience.
According to Wang Qiyan, Vice President of NIO Digital Systems, as early as 2015, NIO began to independently develop and accumulate capabilities for building underlying software.
In 2020, they found that users were dissatisfied with some of the connected car features, and these issues even escalated to "CEO engineering" at one point. Li Bin gave an order to Wang Qiyan at that time: 'This problem must be solved!'
After reviewing, they found that the root cause of the problem lies in the communication module. This is a black box solution purchased from a European supplier, and NIO technicians can only see module abnormalities and cannot locate core vulnerabilities.
Finally, Li Bin personally called the supplier CEO, and NIO's China US team and supplier's European team held meetings every other day to help the supplier identify the root cause of the problem through extensive user data testing.
This incident made Wang Qiyan and his team realize that they must develop an AI oriented global operating system and independently master the underlying software technology of automobiles. So, after 4 years, NIO finally released the full range operating system SkyOS · Tianshu for the entire vehicle, entering the mass production application stage. According to external evaluations, the vehicle wide operating system has pushed the intelligence of the entire vehicle to a new height.
In the entire new energy vehicle industry, NIO has invested heavily in technology research and development. Since 2016, NIO has invested 50 billion yuan in core technology research and development. In the second quarter of this year alone, NIO's R&D investment was 3.218 billion yuan, a month on month increase of 12.4%. NIO also has a global technology research and development team of over 11000 people, with over 9200 patent applications worldwide, ranking first among new forces. All of these have laid a solid foundation for the development of the entire NIO company.
The timing for bottom fishing
This year's "Golden September and Silver October" in the automotive market has made domestic new energy vehicles a hot topic, and many car companies have successively submitted impressive delivery results.
According to data from the China Association of Automobile Manufacturers, the retail sales of new energy vehicles in the market were 408000 units from October 1st to 13th, an increase of 64% year-on-year and 8% year-on-year. In addition, the retail penetration rate of new energy vehicles in China has exceeded the 50% mark for three consecutive months. In the cumulative sales of the first nine months, the retail sales of new energy passenger vehicles reached 7.132 million units, a year-on-year increase of 37.4%.
The acceleration of "oil to electricity" has given NIO and Ledao an opportunity to increase production. Recently, NIO has been continuously "bottom fishing" in the capital market, which reveals the recognition of Li Bin and NIO's strategic decisions by the outside world.
After submitting a second quarter report that exceeded market expectations, NIO's stock price experienced a surge of over 50%. Subsequently, on September 29th, NIO announced another major event: three existing shareholders of NIO China will subscribe for NIO China's newly issued shares with a cash capital increase of 3.3 billion yuan.
Many people have noticed that the strategic investors participating in this capital increase all have state-owned assets, which to some extent represents the country's choice of "patient capital" focused on investing in new quality productivity. A netizen said, "The national team has also come to bargain hunting
On October 4th, a few days later, NIO announced two other major events:
Firstly, a new strategic cooperation agreement has been signed with strategic investor CYVN to establish an advanced technology research and development center in Abu Dhabi, United Arab Emirates, and jointly develop a new car model for the local market.
According to public information, CYVN is an investment institution majority owned by the Abu Dhabi government in the United Arab Emirates, with a strategic focus on the intelligent transportation industry. Last year, CYVN made two strategic investments in NIO, with a total investment amount of approximately 3.3 billion US dollars.
Secondly, we will officially expand our business in the Middle East and North Africa region, with the United Arab Emirates becoming the first market for NIO's Middle East and North Africa division. We will start our business in the UAE in the fourth quarter of this year.
Since 2021, NIO has made significant progress in globalization and has entered multiple European countries including Norway, Denmark, Sweden, Germany, and the Netherlands. This official entry into the Middle East and North Africa markets may indicate that NIO's globalization is still accelerating.
Supported by multiple favorable factors, NIO's scaling up is expected to accelerate and generate deterministic returns, which will not only help NIO form a positive business cycle, but also bring the entire company closer to achieving profitability.
(The content is for reference only and should not be used as any investment advice.)