A public appearance by NIO's chip subsidiary is subtly reshaping the market's valuation logic for this electric vehicle maker.
According to a recent research report from Morgan Stanley, NIO's chip unit, Shenji Technology (GeniTech), made its debut as an independent brand at the 2026 World Artificial Intelligence Conference (WAIC), repositioning itself from a supplier of in-vehicle smart driving chips to a full-domain AI chip platform covering embodied intelligence and inference computing. This strategic shift signals that NIO's stock narrative is gradually transitioning from a "cash-consuming EV maker" to a "vertically integrated AI chip platform," constituting a key vector for valuation reassessment worthy of close attention.
Morgan Stanley maintains an Overweight rating on NIO's Hong Kong-listed shares with a target price of HK$58, representing approximately 48% upside from the closing price of HK$39.26 on July 20. Analyst Tim Hsiao's team pointed out that external financing for Shenji Technology could alleviate NIO's heavy R&D expenditure pressure, thereby supporting the company in achieving its 2026 profitability target.
Strategic Shift: From Vehicle Chips to Full-Domain AI
Shenji Technology's first independent appearance at WAIC 2026 is the core trigger for this re-evaluation of valuation logic.
At the conference, management positioned Shenji Technology as a full-scenario silicon platform spanning three major areas: intelligent assisted driving, embodied intelligence, and intelligent agent inference. Management described it as the only chip manufacturer in China simultaneously covering these three fields.
In terms of product lines, Shenji Technology currently focuses on the NX9031 series. The high-end NX9031X model targets assisted driving and is already installed in all models of NIO and its sub-brand Onvo, with cumulative shipments exceeding 300,000 units. The mid-range NX9031U, based on the same 5-nanometer automotive-grade process, can provide up to 800 TOPS equivalent computing power under air-cooled conditions and supports the "RuiDong" embodied intelligence development platform for robot perception planning, intelligent computing, and advanced manufacturing. Additionally, Shenji Tech has launched a distributed intelligent agent platform, paired with NX9031C/NX6031 perception chips.
Morgan Stanley believes that, for investors, the truly critical aspect is Shenji Tech's expansion from driving scenarios to workloads such as humanoid robot training and inference, unmanned logistics, and high-computing terminals—these are precisely the adjacent tracks that can broaden an automotive supplier's addressable market and add upside to the growth story.
Dual Catalysts: Financing and Cost Reduction
The commercialization progress of Shenji Technology is providing tangible support for NIO from both financing and cost dimensions.
On the financing front, since its spin-off in June 2025, Shenji Tech has attracted nearly RMB 3 billion in external capital. An external funding round completed this February set its post-investment valuation at approximately RMB 8.3 billion. The continuous injection of external capital helps share the heavy R&D burden of the NIO Group, creating conditions for achieving the 2026 profit target.
On the cost front, the substitution effect of self-developed chips for imported computing power cannot be ignored. The report notes that the computing power of a single NX9031 chip is equivalent to four Nvidia Orin processors, and each additional unit shipped allows the fixed R&D costs to be spread over a larger sales base. Notably, Shenji Tech began licensing NX9031 technology to third-party automotive chip manufacturers at the end of 2025, adding a new layer of royalty income. Economies of scale combined with self-supply capabilities are expected to gradually transform NIO's chip business from a drag on profits to a protector of profits.
Valuation Rebuild: Chip Unit as a Separate Call Option
NIO currently holds approximately 63% controlling stake in Shenji Tech, meaning the chip business has become an increasingly visible call option within the listed company, existing in parallel with the core automotive business.
Morgan Stanley's base case target price for NIO's Hong Kong shares is HK$50, corresponding to 0.8 times the expected 2026 price-to-sales ratio, with the company projected to achieve profitability in 2027. The bull case target price is HK$109 (corresponding to 1.8 times the expected 2026 P/S), while the bear case target is HK$21 (corresponding to 0.3 times).
Regarding financial forecasts, NIO's 2026 revenue is estimated at approximately RMB 128.6 billion, with EBITDA turning positive to around RMB 2.6 billion and net loss narrowing to about RMB 3.3 billion; 2027 is expected to see a return to net profit. Key upside risks include: better-than-expected sales volume for the NIO and Onvo brands, and accelerated penetration of ADAS services. Key downside risks include: sales falling short of expectations, slow improvement in operational efficiency, and pressure on overall industry valuations.
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