highhand
2022-09-12

Is NIO the "Next Interesting Option"? [Glance] 

7 Sep Q2 EARNINGS

-Top line Revenue surprise of 10.29B reported vs 9.77B expected.

-Bottom line EPS disappoint by -1.34 reported vs -1.22 expected

All figures in Chinese Yuan CNY.

Losses increased due to cost volatility and that caused a drop in net income.

NIO is conservative with guidance for Q3.

- Vehicle deliveries between 31,000 and 33,000. Analyst expected 37,000.

- Revenue are expected to be in the range of 12.8 billion yuan to 13.6 billion yuan. Analysts expected 16.6 billion yuan.

These are similar results and lower guidance from Chinese electric vehicle manufacturers. 

STOCK MOVEMENT

The stock traded above the 50-SMA for a while from mid June to end July. On 15 Aug, 50-SMA crossed the 150 SMA and there were hopes that it was part of an uptrend. Unfortunately, the stock traded back down the 50-SMA and has difficulty breaking it again.

Stock surged 8.37% during trading hours Fri to close 19.16. There's strong support at this level of ~$19 which coincides to a resistance level back in Sep-Oct 2020.

The next level of support is 16.58. This support was formed in April to June and most recently, touched it on 7 Sep.

The third level of strong support is at ~$13.80, again seen as resistance in Jul-Aug 2020. It is unlikely to see this support unless things get very bad.

TARGET PRICE

At current stock price of 19.18, NIO price-to-book and price-to-sales is higher than rivals. 

$XPeng Inc.(XPEV)$ : PB 2.39 PS 3.28

$Li Auto(LI)$: PB 4.2 PS 4.85

$BYD Co., Ltd.(BYDDF)$: PB 1.86 PS 0.65

I think a better entry would be at the next support price of 16.58.

OPTIONS TRADE

Given NIO's price volatility, I have been selling puts on NIO at strike 12-15 without being assigned.

There's low probability that NIO will drop below 15, but even if it does, at these strike price, the stock is quite attractive.

Overall, I'm not looking to hold NIO unless through options assignment at a much lower price. My bet is on the leader and first mover Tesla. [Happy] 

@TigerStars@Tiger_chat@MillionaireTiger

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

  • shining87
    2022-09-12
    shining87
    NIO fell last week after dismal earnings. This stock is now underperforming the market and should reject its 150 DMA around $19.50.
    • highhand: 
      market is illogical. see where it is now
  • jeffry09
    2022-09-12
    jeffry09
    I bought at $12, $14 and 18 and see this 4 times that high easy.
    • highhand: 
      woo... your entry prices are yummy
  • familoveyou
    2022-09-12
    familoveyou
    NIO had sluged for a whole year.
  • XantheJuliana
    2022-09-12
    XantheJuliana
    NIO will be able to produce over 1 millions cars a year,,,revnue over $50 Billions.I am bullish on NIO.
  • ngchris
    2022-09-13
    ngchris
    given d chips market issues, tight labor n all, best to stay away from EV shares for now
    • highhand: 
      stay away from EV shares can, but there's one EV you cannot stay away from. T***A [Happy]
  • CYKuan
    2022-09-13
    CYKuan
    Nio still in watchlist but not yet in my portfolio
    • highhand: 
      buy at support, not when its rising. its sure to come down after rallying
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