CICC Maintains Outperform Rating on NIO-SW (09866) with HK$62 Target Price

Stock News11-27

CICC released a research report stating that NIO-SW (09866) currently trades at 0.7x/0.8x 2026 P/S for its US and Hong Kong shares, respectively. The firm maintains an Outperform rating, with target prices of HK$62 and US$8 for the Hong Kong and US shares, corresponding to 1.0x 2026 P/S, implying 32% and 46% upside potential from current levels.

NIO reported its 3Q25 results with revenue of RMB21.79 billion, in line with market and CICC's expectations. Key highlights include: - **Performance Meets Expectations, Reforms Yield Results**: The company delivered 87,071 vehicles in 3Q25, generating RMB21.79 billion in revenue. Gross margin improved by 3.9 percentage points (ppt) QoQ to 13.9%, while automotive gross margin rose 4.4 ppt QoQ to 14.7%, the highest since 1Q23, driven by cost reductions and higher contribution from the L90 model. Other gross margins remained positive at 7.8%. R&D and SG&A expenses were RMB2.39 billion and RMB4.19 billion, respectively, with R&D costs declining by ~RMB600 million QoQ. Higher SG&A expenses were attributed to new model launches, but overall expense ratio dropped 6.5 ppt QoQ to 30.2%.

- **Strong Product Cycle Continues, 4Q Sales Expected to Hit New Highs**: NIO guided for 4Q deliveries of 120,000–125,000 vehicles, maintaining robust momentum. CICC remains optimistic about the company’s product cycle and operational improvements through 2026. The existing 5566 models are expected to support sales recovery with the standardization of 100kWh batteries. The firm highlights NIO’s clear brand positioning and improved structure post-CBU (Cell Business Unit) reforms. In 2026, NIO plans to launch three SUV models—ES9, ES7, and L80—in 2Q–3Q, further solidifying its position in the premium EV segment. Additionally, the Firefly sub-brand is accelerating global expansion.

- **Positive Cash Flow and Enhanced Financial Cushion**: Driven by strong product cycles, NIO achieved positive operating and free cash flow in 3Q. The company raised US$1.16 billion through a public share offering on September 17, with proceeds earmarked for R&D in smart EV technologies, next-gen platforms, charging infrastructure expansion, and balance sheet optimization. CICC believes these measures further strengthen NIO’s financial resilience.

**Risks**: Intensified competition may dampen demand, while cost controls and battery-swapping partnerships could fall short of expectations.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment