We have an EV company listed on SGX!

Written by @长线投资不投机

So happy to see that one of the more prominent electric vehicle (EV) players, NIO Inc (Stock Code: NIO), has listed on the Singapore Exchange!

Undoubtedly, there is huge growth potential for the EV market. Many countries including Singapore are introducing EV to the car market. More charging stations are being built and tax savings provided for those who choose an EV over a petrol car instead. Adoption rate of EV has also been encouraging. Using Singapore as a proxy, the EV share of new car registration jumped to 4% in 2021, up from 0.2% in 2020. The Singapore government also has plans to phase out petrol cars by 2040. Just from these numbers, we can expect sales of EV in general to multiply quickly over the next few years!

Looking at their IPO prospectus, the company is still in loss. However, we can see the loss reducing over the years and revenue growing. To have a sense of their valuation, we probably can use book value and price to sales at this juncture.  

The price to book value of the top EV players are:

• Tesla - 20.18
• Lucid Motors - 8.01
• NIO - 5.35
• Rivian - 1.43
• Li Auto - 3.96

The price to sales comparison:

• Tesla - 12.12
• Lucid Motors - 362.85
• NIO - 4.84
• Rivian - 173.71
• Li Auto - 4.54

(Data Source: Yahoo finance, 26 May 22)

Judging from these numbers, the price of the counter does not seem overvalued, especially compared with US based EV companies.

In summary, I am very happy that such counters are not available in SGX. This is definitely a growth stock for me. Above valuation suggests that it is not expensive but the fact remains that it has yet to prove itself with a bottomline. so it really depends on one's risk appetite to decide if now is the right time to enter.