Update on August 11:
NIO shares surge 11% pre-market as it sees lowest operating loss in Q2
Original report on August 7:
NIO will report its second-quarter 2020 results on August 11, before US stock markets open.
Its CEO, Li Bin, said in the last earnings call that "Q2 gross margin will turn positive," and its shares subsequently saw a nearly three-fold increase. This time, investors will undoubtedly focus on gross margin metrics.
In addition to this, orders and the pace of production expansion will also be a topic of interest to the market, which will determine whether NIO can continue to increase deliveries and establish stronger improvement expectations in the second half of the year.
Deliveries exceeded 10,000 for the first time
Based on monthly data, NIO delivered a total of 10,331 vehicles in the second quarter, up 159 percent year-on-year.
This is the first time it has delivered more than 10,000 units in a single quarter and also exceeded its management team's previous guidance of 9,500-10,000 units.
The delivery levels in the second quarter also climbed month-on-month, showing significant growth.
There are a number of reasons for this growth, including the finalization of the 10 billion yuan financing, support for its battery swap model in China, and the positive reception NIO has received for its products and services.
Nio China secures 10.4 billion yuan credit line from six Chinese banks
All of this has helped reassure the market and unleash consumer buying enthusiasm.
In addition, the supply chain issues that plagued NIO's production and sales in the first quarter were resolved in April, so the second quarter was positive on both the demand and supply sides.
Various positive factors led to a burst of demand in the second quarter.
Across the market, NIO's sales have continued to rise this year in competition with Tesla, and this strong performance is key to supporting its recent valuation repair.
Will there be a surprise in gross profit?
With record deliveries, NIO is sure to deliver an excellent earnings report to the market this time. The only question is whether the gross margin improvement will exceed expectations and will the result be a 5 percent growth in line with guidance or higher?
In the last earnings call, Li Bin gave very optimistic guidance:
1) A record 9,500-10,000 vehicles will be delivered in the second quarter and revenue is expected to be between 3.3 and 3.5 billion yuan (up 123 percent to 134 percent year on year).
2) Gross margins are expected to reach 5 percent for the vehicle business in the second quarter and 3 percent overall.
3) Delivery of EC6 in September, with no change in plans to deliver 100 kWh battery packs in Q4.
4) At the NIO Day to be held at the end of the year, it will release a new car (probably a sedan).
On July 24, Li Bin once again told the media that gross margins definitely turned positive and losses were narrowing in the second quarter.
NIO enters into strategic partnership with Chinese retail giant Suning
NIO delivered a total of 3838 cars in the first quarter, and 10,331 units in the second quarter, a significant increase of 169 percent.
NIO's second-quarter revenue is expected to be about 3.49 billion yuan, up 131.5 percent year on year, and 154.4 percent from the previous quarter, according to analyst expectations compiled by Bloomberg.
NIO's gross margin is expected to be 2.98 percent for the second quarter.
Currently, 5 analysts have a "Buy" rating, 7 analysts recommend Hold and 3 analysts recommend Sell.
