Despite the intense competition in the EV space in China, a global slowdown in EV demand, and tariffs impacting operations in Europe, Hong Kong-based automaker NIO Inc.’s stock (HK:9866) has faced a substantial decline of nearly 60% year-to-date. The company’s ambitious goals have been hindered; however, analysts cautiously anticipate a potential rebound in NIO’s share price, although challenges loom on the horizon before any significant gains can be realized.
NIO is a leading Chinese automotive company distinguished for its premium smart EVs.
NIO’s Strength: July EV Deliveries Surpass 20,000 Mark Again
In a recent update, NIO revealed its July delivery figures, exceeding 20,000 vehicles sold for the third consecutive month. The company successfully delivered 20,498 vehicles in July, marking a modest 3.35% drop from the previous month but still achieving a slight 0.18% year-over-year growth. Year-to-date up to July, NIO has delivered a total of 107,924 EVs, showing a remarkable 43.9% surge compared to the same period last year.
Comparatively, BYD Co. Limited’s EV sales (HK:1211) witnessed a 10% decline in July, dropping to 130,000 units.
Looking ahead, NIO is preparing for the launch of the Onvo L60 SUVs in September, a lower-cost, mass-market SUV model set to rival Tesla’s Model Y (TSLA) with expectations of significantly boosting the company’s sales.
Analysts’ Perspectives and Predictions
In June, NIO’s Hong Kong-listed shares garnered three ratings, comprising two Holds and one Buy recommendation. Jefferies and Macquarie both maintained their Hold positions, anticipating potential upsides of 35% and 40%, respectively.
On the other hand, analyst Rachel Miu from DBS expressed optimism with a Buy rating for NIO. DBS foresees an enhancement in the company’s vehicle margin in FY24 to 13.5% from 9.5% in the previous year, driven by increased sales and a more reliable cost structure.
Miu is upbeat about the prospects of NIO’s Onvo L60 SUV, predicting a surge in the company’s Q4 sales. DBS projects NIO’s sales volume to reach 216,000 in FY24, reflecting a substantial 35% year-over-year growth.
According to the consensus among analysts on TipRanks, 9866 stock has been assigned a Moderate Buy rating, with a share price target of HK$41.25. This target suggests an upside potential of 37.7% from the current price level.
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