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StoneyHunt

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- StoneyHuntStoneyHunt
  ·2023-09-28
  $Palantir Technologies Inc.(PLTR)$
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- StoneyHuntStoneyHunt
  ·2023-09-27
  🤔🙄😅
  NIO: Take The Money And Run
  NIO's financial performance continues to deteriorate as margins decline and cash burn remains high.The ongoing price war in the EV industry and China's economic slowdown are unlikely to help NIO impro
  NIO: Take The Money And Run
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- StoneyHuntStoneyHunt
  ·2023-09-07
  $VinFast Auto(VFS)$
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href=\"https://ttm.financial/S/PLTR\">$Palantir Technologies Inc.(PLTR)$&nbsp;</a><v-v data-views=\"1\"></v-v>","listText":"<a href=\"https://ttm.financial/S/PLTR\">$Palantir Technologies Inc.(PLTR)$&nbsp;</a><v-v data-views=\"1\"></v-v>","text":"$Palantir Technologies Inc.(PLTR)$","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/224875574403152","isVote":1,"tweetType":1,"viewCount":79,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":224441538977832,"gmtCreate":1695804213707,"gmtModify":1695804523988,"author":{"id":"4153635540742682","authorId":"4153635540742682","name":"StoneyHunt","avatar":"https://community-static.tradeup.com/news/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4153635540742682","authorIdStr":"4153635540742682"},"themes":[],"htmlText":"🤔🙄😅","listText":"🤔🙄😅","text":"🤔🙄😅","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/224441538977832","repostId":"2370206858","repostType":2,"repost":{"id":"2370206858","pubTimestamp":1695802422,"share":"https://ttm.financial/m/news/2370206858?lang=&edition=fundamental","pubTime":"2023-09-27 16:13","market":"us","language":"en","title":"NIO: Take The Money And Run","url":"https://stock-news.laohu8.com/highlight/detail?id=2370206858","media":"seekingalpha","summary":"NIO's financial performance continues to deteriorate as margins decline and cash burn remains high.The ongoing price war in the EV industry and China's economic slowdown are unlikely to help NIO impro","content":"<html><head></head><body><ul style=\"\"><li><p>NIO&#39;s financial performance continues to deteriorate as margins decline and cash burn remains high.</p></li><li><p>The ongoing price war in the EV industry and China&#39;s economic slowdown are unlikely to help NIO improve its business.</p></li><li><p>Geopolitical risks, such as China&#39;s tightening grip on the private sector and potential trade wars, further hinder NIO&#39;s prospects.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/17c161dde7ed77ecdefcfa31255d0858\" title=\"\" tg-width=\"750\" tg-height=\"500\"/></p><p>The current price war within the EV industry is making it hard to justify opening a long position in NIO (NYSE:NIO) even at the current price. While the company managed to finally improve its rate of deliveries in August, its margins continue to deteriorate while its cash burn rate remains at unsustainable levels. As such, NIO would likely be prompted to increase additional liquidity that would dilute its shareholders, as the slowdown of China along with tough competition in Europe are unlikely to help the company&#39;s business to improve its financial performance anytime soon.</p><h2 id=\"id_1951163960\">The Worst Is Likely Not Over Yet</h2><p>Back in July, I warned that NIO is likely to disappoint investors as the company&#39;s deliveries in recent months were weak while its margins have been deteriorating for quite some time. That&#39;s exactly what has happened as the Q2 earnings results that were released in the last week of August showed that NIO&#39;s revenues during the three months were down 14.8% Y/Y to $1.21 billion and below the expectations by $60 million, while its non-GAAP EPADs was -$0.45, also below the expectations by $0.04. In addition to that, the deliveries in Q2 decreased by 6.1% Y/Y to 23,520 vehicles, while the vehicle margin was 6.2% against 16.7% a year ago.</p><p>While the company managed to improve its deliveries in August, which increased by 81% Y/Y to 19,329 vehicles, there are still plenty of reasons to believe that it won&#39;t help the company improve its margins or the bottom-line performance anytime soon. This is mostly due to the fact that the EV industry is currently in the middle of a price war that affects each car manufacturer across the globe. Even Tesla&#39;s (TSLA) margins have been contracting in recent quarters and are unlikely to improve anytime soon due to the fierce competition in a saturated market. What&#39;s more, is that the systemic issues that China currently faces could also have a negative effect on the whole industry in the foreseeable future.</p><p>In addition to all of that, NIO has also been constantly underperforming and disappointing its investors by missing expectations in recent quarters. This has resulted in a major depreciation of its shares in the last year alone, and besides the short-lived rebound in late July, its stock is stuck in limbo without any major growth catalysts that could&#39;ve helped the business improve the situation.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/2519d8c380ce1392d924f0cc3620dc35\" title=\"\" tg-width=\"640\" tg-height=\"232\"/></p><p>NIO&#39;s Stock Performance (Seeking Alpha)</p><p></p><p>Even if the company ramps up its deliveries in the following months, its bottom-line would continue to suffer as the ongoing price war would prevent the company from significantly improving its margins in the foreseeable future. Despite the growth of deliveries in August, the street estimates that NIO&#39;s EPS in Q3 would stand at -$0.40 per share, down 12.26% Y/Y. At the same time, if we take a closer look at NIO&#39;s income statement, we&#39;ll see that its margins have been steadily declining in recent quarters and its gross margin in Q2 was only ~1%, down from ~13% a year ago.</p><p>What&#39;s more is that if we look at NIO&#39;s balance sheet, we&#39;ll see that the company&#39;s cash burn stands at around $1 billion per quarter and at the end of Q2 the business had only $3.8 billion in cash reserves. While the company managed to receive additional funding in late June from one of UAE&#39;s investment funds, the proceeds from the deal are likely to disappear within one quarter given the business&#39;s aggressive cash burn rate. In addition to that, NIO also proposed the offering of $1 billion convertible notes last week which shows that liquidity is slowly becoming an issue in this new environment. The cash from the offering is likely to be gone in another quarter as well if the company continues to burn resources at the current rate.</p><p>As such, the company would likely continue to look for more funding which would result in additional dilution of its existing shareholders, especially since the ongoing price war is likely going to result in a further contraction of margins even if the deliveries increase.</p><p>That&#39;s one of the main reasons why NIO has been receiving dozens of downward EPS revisions in recent months, as there are no major growth catalysts that could improve the company&#39;s financial state of affairs at this stage. That&#39;s also why I think that it&#39;s unlikely that we&#39;ll see a major rally anytime soon as the worst is likely not over yet for NIO.</p><h2 id=\"id_3106033409\">Emerging Risks On The Horizon</h2><p>In addition to financial issues, there are also geopolitical risks that make investing in NIO questionable at best. Almost a year ago I stated that China is uninvestable, as the Chinese government is likely to strengthen its grip over the private sector, which could diminish the potential returns for investors due to the implementation of programs such as the <em>Common Prosperity</em> that aims to redistribute wealth across the Chinese society. Since that time, NIO&#39;s stock has greatly underperformed the S&amp;P 500 Index and there are more than enough reasons to believe that it will be the case in the foreseeable future due to the rise of additional geopolitical risks that could accelerate capital outflow from China.</p><p>On top of all of this, it&#39;s also hard to see how NIO could scale its sales in Europe to mitigate China-related risks. The company started to sell its vehicles in European markets in recent quarters, but the results have been subpar at best. In Q2, NIO sold only 504 vehicles in Europe, while in Q3 so far it sold only 681 of its EVs.</p><p>What&#39;s more, is that there are reasons to believe that it will become much harder for NIO and its Chinese peers to scale their sales in the region in the following quarters. On September 11 it was reported that France is pressuring the European Commission into opening an anti-dumping investigation against Chinese EV manufacturers. On September 13, it was announced that the European Commission has officially opened a probe against the Chinese manufacturers in order to stop the flood of EV imports into the bloc as it hurts the local producers. Such a move could result in a trade war with China that could make it nearly impossible for NIO and its peers to compete with legacy European automakers, especially in new tariffs are going to be announced. While companies like Tesla would be able to mitigate the trade war risks thanks to having their own production in the EU, firms like NIO that produce their vehicles solely on Chinese soil and ship them to other countries could lose access to one of the biggest EV markets in the world.</p><h2 id=\"id_830065143\">The Bottom Line</h2><p>It&#39;s safe to say that the current price war within the EV industry amid the slowdown of China would make it significantly harder for NIO to improve its financial performance as there&#39;s nothing that could stop the contraction of its margins at this stage. Add to all of this the potential headwinds that the company is likely to face in Europe and it becomes even harder to justify opening a long position in NIO even at the current market price.</p><p>Editor&#39;s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>NIO: Take The Money And Run</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNIO: Take The Money And Run\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-09-27 16:13 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4637091-nio-take-the-money-and-run><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>NIO's financial performance continues to deteriorate as margins decline and cash burn remains high.The ongoing price war in the EV industry and China's economic slowdown are unlikely to help NIO ...</p>\n\n<a href=\"https://seekingalpha.com/article/4637091-nio-take-the-money-and-run\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"IE00BSNM7G36.USD":"NEUBERGER BERMAN SYSTEMATIC GLOBAL SUSTAINABLE VALUE \"A\" (USD) ACC","BK4581":"高盛持仓","BK4504":"桥水持仓","LU0234572021.USD":"高盛美国核心股票组合Acc","LU0820561909.HKD":"ALLIANZ INCOME AND GROWTH \"AM\" (HKD) INC","LU2063271972.USD":"富兰克林创新领域基金","BK4099":"汽车制造商","BK4511":"特斯拉概念","TSLA":"特斯拉","LU0056508442.USD":"贝莱德世界科技基金A2","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","LU0097036916.USD":"贝莱德美国增长A2 USD","LU2326559502.SGD":"Natixis Loomis Sayles US Growth Equity P/A SGD-H","LU0689472784.USD":"安联收益及增长基金Cl AM AT Acc","LU2087621335.USD":"ALLSPRING GLOBAL FACTOR ENHANCED EQUITY \"A\" (USD) ACC","LU1852331112.SGD":"Blackrock World Technology Fund A2 SGD-H","LU1720051017.SGD":"Allianz Global Artificial Intelligence AT Acc H2-SGD","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","BK4592":"伊斯兰概念","LU1861215975.USD":"贝莱德新一代科技基金 A2","LU0316494557.USD":"FRANKLIN GLOBAL FUNDAMENTAL STRATEGIES \"A\" ACC","LU1548497426.USD":"安联环球人工智能AT Acc","LU1861558580.USD":"日兴方舟颠覆性创新基金B","LU1861220033.SGD":"Blackrock Next Generation Technology A2 SGD-H","LU0820561818.USD":"安联收益及增长平衡基金Cl AM DIS","LU0052750758.USD":"富兰克林中国基金A Acc","LU0320764599.SGD":"FTIF - Templeton China A Acc SGD","BK4585":"ETF&股票定投概念","EVS.SI":"MSCI China Electric Vehicles and Future Mobility ETF-NikkoAM","BK4555":"新能源车","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","BK4509":"腾讯概念","LU1720051108.HKD":"ALLIANZ GLOBAL ARTIFICIAL INTELLIGENCE \"AT\" (HKD) ACC","LU0943347566.SGD":"安联收益及增长平衡基金AM H2-SGD","BK4527":"明星科技股","LU0234570918.USD":"高盛全球核心股票组合Acc Close","LU1839511570.USD":"WELLS FARGO GLOBAL FACTOR ENHANCED EQUITY \"I\" (USD) ACC","NIO":"蔚来","LU1861559042.SGD":"日兴方舟颠覆性创新基金B SGD","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","BK4526":"热门中概股","BK4588":"碎股","09866":"蔚来-SW","BK4505":"高瓴资本持仓","BK4550":"红杉资本持仓","LU0708995583.HKD":"TEMPLETON CHINA \"A\" (HKD) ACC","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","BK4574":"无人驾驶","BK4551":"寇图资本持仓","NIO.SI":"蔚来"},"source_url":"https://seekingalpha.com/article/4637091-nio-take-the-money-and-run","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2370206858","content_text":"NIO's financial performance continues to deteriorate as margins decline and cash burn remains high.The ongoing price war in the EV industry and China's economic slowdown are unlikely to help NIO improve its business.Geopolitical risks, such as China's tightening grip on the private sector and potential trade wars, further hinder NIO's prospects.The current price war within the EV industry is making it hard to justify opening a long position in NIO (NYSE:NIO) even at the current price. While the company managed to finally improve its rate of deliveries in August, its margins continue to deteriorate while its cash burn rate remains at unsustainable levels. As such, NIO would likely be prompted to increase additional liquidity that would dilute its shareholders, as the slowdown of China along with tough competition in Europe are unlikely to help the company's business to improve its financial performance anytime soon.The Worst Is Likely Not Over YetBack in July, I warned that NIO is likely to disappoint investors as the company's deliveries in recent months were weak while its margins have been deteriorating for quite some time. That's exactly what has happened as the Q2 earnings results that were released in the last week of August showed that NIO's revenues during the three months were down 14.8% Y/Y to $1.21 billion and below the expectations by $60 million, while its non-GAAP EPADs was -$0.45, also below the expectations by $0.04. In addition to that, the deliveries in Q2 decreased by 6.1% Y/Y to 23,520 vehicles, while the vehicle margin was 6.2% against 16.7% a year ago.While the company managed to improve its deliveries in August, which increased by 81% Y/Y to 19,329 vehicles, there are still plenty of reasons to believe that it won't help the company improve its margins or the bottom-line performance anytime soon. This is mostly due to the fact that the EV industry is currently in the middle of a price war that affects each car manufacturer across the globe. Even Tesla's (TSLA) margins have been contracting in recent quarters and are unlikely to improve anytime soon due to the fierce competition in a saturated market. What's more, is that the systemic issues that China currently faces could also have a negative effect on the whole industry in the foreseeable future.In addition to all of that, NIO has also been constantly underperforming and disappointing its investors by missing expectations in recent quarters. This has resulted in a major depreciation of its shares in the last year alone, and besides the short-lived rebound in late July, its stock is stuck in limbo without any major growth catalysts that could've helped the business improve the situation.NIO's Stock Performance (Seeking Alpha)Even if the company ramps up its deliveries in the following months, its bottom-line would continue to suffer as the ongoing price war would prevent the company from significantly improving its margins in the foreseeable future. Despite the growth of deliveries in August, the street estimates that NIO's EPS in Q3 would stand at -$0.40 per share, down 12.26% Y/Y. At the same time, if we take a closer look at NIO's income statement, we'll see that its margins have been steadily declining in recent quarters and its gross margin in Q2 was only ~1%, down from ~13% a year ago.What's more is that if we look at NIO's balance sheet, we'll see that the company's cash burn stands at around $1 billion per quarter and at the end of Q2 the business had only $3.8 billion in cash reserves. While the company managed to receive additional funding in late June from one of UAE's investment funds, the proceeds from the deal are likely to disappear within one quarter given the business's aggressive cash burn rate. In addition to that, NIO also proposed the offering of $1 billion convertible notes last week which shows that liquidity is slowly becoming an issue in this new environment. The cash from the offering is likely to be gone in another quarter as well if the company continues to burn resources at the current rate.As such, the company would likely continue to look for more funding which would result in additional dilution of its existing shareholders, especially since the ongoing price war is likely going to result in a further contraction of margins even if the deliveries increase.That's one of the main reasons why NIO has been receiving dozens of downward EPS revisions in recent months, as there are no major growth catalysts that could improve the company's financial state of affairs at this stage. That's also why I think that it's unlikely that we'll see a major rally anytime soon as the worst is likely not over yet for NIO.Emerging Risks On The HorizonIn addition to financial issues, there are also geopolitical risks that make investing in NIO questionable at best. Almost a year ago I stated that China is uninvestable, as the Chinese government is likely to strengthen its grip over the private sector, which could diminish the potential returns for investors due to the implementation of programs such as the Common Prosperity that aims to redistribute wealth across the Chinese society. Since that time, NIO's stock has greatly underperformed the S&P 500 Index and there are more than enough reasons to believe that it will be the case in the foreseeable future due to the rise of additional geopolitical risks that could accelerate capital outflow from China.On top of all of this, it's also hard to see how NIO could scale its sales in Europe to mitigate China-related risks. The company started to sell its vehicles in European markets in recent quarters, but the results have been subpar at best. In Q2, NIO sold only 504 vehicles in Europe, while in Q3 so far it sold only 681 of its EVs.What's more, is that there are reasons to believe that it will become much harder for NIO and its Chinese peers to scale their sales in the region in the following quarters. On September 11 it was reported that France is pressuring the European Commission into opening an anti-dumping investigation against Chinese EV manufacturers. On September 13, it was announced that the European Commission has officially opened a probe against the Chinese manufacturers in order to stop the flood of EV imports into the bloc as it hurts the local producers. Such a move could result in a trade war with China that could make it nearly impossible for NIO and its peers to compete with legacy European automakers, especially in new tariffs are going to be announced. While companies like Tesla would be able to mitigate the trade war risks thanks to having their own production in the EU, firms like NIO that produce their vehicles solely on Chinese soil and ship them to other countries could lose access to one of the biggest EV markets in the world.The Bottom LineIt's safe to say that the current price war within the EV industry amid the slowdown of China would make it significantly harder for NIO to improve its financial performance as there's nothing that could stop the contraction of its margins at this stage. Add to all of this the potential headwinds that the company is likely to face in Europe and it becomes even harder to justify opening a long position in NIO even at the current market price.Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.","news_type":1},"isVote":1,"tweetType":1,"viewCount":169,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":217395392213128,"gmtCreate":1694098988033,"gmtModify":1694100046231,"author":{"id":"4153635540742682","authorId":"4153635540742682","name":"StoneyHunt","avatar":"https://community-static.tradeup.com/news/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4153635540742682","authorIdStr":"4153635540742682"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/VFS\">$VinFast Auto(VFS)$ &nbsp;</a>","listText":"<a href=\"https://ttm.financial/S/VFS\">$VinFast Auto(VFS)$ &nbsp;</a>","text":"$VinFast Auto(VFS)$","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/217395392213128","isVote":1,"tweetType":1,"viewCount":109,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"defaultTab":"posts","isTTM":true}