To The Moon

1. Nio Motors' first-quarter revenue fell short of expectations

Nio Motors delivered 31,041 vehicles in the first quarter, including 10,430 premium smart electric SUVs and 20,611 premium smart electric sedans, up 20.5% year-over-year from the first quarter of 2022 and down 22.5% sequentially from the fourth quarter of 2022 (peak quarter). $NIO-SW(09866)$ 

Operating revenue for the first quarter of 2023 was 10.68 billion yuan, breaking 10 billion for the fourth consecutive quarter, but less than the market's expectation of 12.275 billion yuan and up 8% from 9.911 billion in the first quarter of last year, ranking second among the new car makers "Azure Xiaoli" and lagging behind Ideal Auto's 18.79 billion, starting to fall behind.

In terms of net profit, this year's first quarter loss of 4.74 billion yuan is the largest loss among the "Ui Xiaoli", while the ideal car net profit has turned positive, becoming the first new force car company to start "making money", the gap is still quite obvious.

2, Nio car earnings brief analysis: stocks, convertible bonds and borrowing and other ways to finance, only to achieve stable profitability as soon as possible

By collating the most recent annual report that is 2022 earnings data, the formation of earnings summary table is as follows.

Through the summary table, we can see that the company has the following characteristics:

① Quasi-currency 42.2 billion yuan (23 billion in cash + 19.2 billion in readily realizable short-term investments), accounting for 44% of total assets, a very high proportion of ah, seems to be very rich, but for the last five years has been a loss of Nio car where to get the cash, through the years of earnings tracking found that is through the continuous issuance of shares, convertible bonds and loans and other ways to raise funds, such as the 2018 listing and Although the net profit loss in the past five years is more than 40 billion, the net operating cash in the past five years is about -16.5 billion (positive in 2020 and 2021), which is basically the result of issuing convertible bonds and borrowing. But if the main business does not turn around, it will be difficult to borrow again. I hope we can successfully reach the important goal of break-even in 2024 set by the management, otherwise the quasi-currency will not be enough at this rate of burning money (4.4 billion to 37.8 billion in the first quarter of this year).

The fact that the amount of prepayments receivable is lower than prepayments payable shows that the company still has some competitive advantages in the whole industry chain. Nio Motors has already imprinted its reputation as a high-end car brand in the hearts of Chinese people, and at the same time, it has tightly grasped the psychology of users through its characteristic circle culture. More is better.

(3) Fixed assets temporarily accounted for about 16%, compared with peers is low, because Nio car choose to find JAC OEM, not a lot of investment in plant equipment and other fixed assets, with the increase in sales and production capacity bottleneck, now Nio car has begun to build a new base with JAC joint venture new plant (Hefei Xinqiao intelligent electric vehicle industrial park, planning 1 million units capacity, 100GWh battery capacity, annual output value of 100GWh battery production capacity, the new base of the new plant. 100GWh battery capacity, annual output value of 500 billion), the proportion of this piece will be significantly increased in the future, and the subsequent cost of maintaining competitiveness will be increasingly high.

④ investment assets are mainly joint investment in core components such as batteries business, to facilitate better control of costs and supply stability, accounting for less than 7% of the last three years, in addition to the epidemic 2020 loss, the rest are profitable, combined with the new energy boom market, the battery in these years to earn money hand cramps, can also understand the investment income is good.

⑤ company's inventory 2022 quickly increased to 8.2 billion, accounting for 8.5%, although not high, but compared to 2021 2.1 billion, an increase of nearly 4 times, according to the management mentioned the ES8, ES6 and EC6 and other related models of inventory provisions to improve the gross margin is low, with reasons to be further observed.

(6) Nio Automotive's operating income has grown rapidly in the past five years, strongly related to the rapid increase in sales vehicles, vehicle deliveries from 11,300 units in 2018 to 122,500 units in 2022, operating income has also increased rapidly from 4,951 million to 49,269 million, basically maintaining synchronization, sales and revenue are both five-year growth of nearly 10 times, the development is still very fast, but the net profit in the past five years However, in the past five years, the net profit has continued to lose money, with a cumulative loss of 44.7 billion yuan in five years, and the net profit attributable to the mother company has lost even more money, with a cumulative loss of nearly 65.5 billion yuan.

(7) Why does Nio Motors "sell more and lose more"? The main reason is that the gross profit margin of the whole car is significantly lower, four quarters in 2022, Nio whole car gross profit margin continued to decline, respectively, 18.1%, 16.7%, 16.4%, 6.8%, the gross profit margin continued to decline to 5.1% in the first quarter of this year, while the gross profit margin in 2021 are stable above 20%, including Tesla and ideal and other gross profit margin, etc. are more than 20%. The reason for the decline in Nio's gross margin is related to the provision for inventory, accelerated depreciation of production facilities and loss of purchase commitments for ES8, ES6 and EC6 models, which impacted the gross margin of 6.7 percentage points in the fourth quarter of 2022, and the reason given by the management in the first quarter of this year is the increase in cost due to the increase in battery price, which further reduced the gross margin.

Meanwhile, Nio's selling, general and administrative expenses reached 10.537 billion yuan, up 53.2% year-on-year; investment in R&D also continued to expand, with R&D expenses reaching 10.836 billion yuan in 2022, up 136% year-on-year compared to 4.592 billion yuan in 2021, which also stems from Nio Motors' consistent focus on user experience while adopting a big money-burning operating model, since the initial Since it positioned itself as "the undersea fishery of the automobile industry", Nio is destined to pay high service and other related costs.

3、Fundamental analysis: Nio car development speed exceeds the industry growth, this year's production capacity may help sales continue to maintain high growth

1) The proportion of new energy vehicle sales completed the national planning target three years ahead of schedule, and the development momentum is strong

According to the State Council issued the "new energy vehicle industry development plan (2021-2035)", which clearly by 2025, new energy vehicle sales accounted for about 20%, is expected to reach 30 million units in 2025, so new energy vehicle sales to exceed 6 million units.

In fact, new energy vehicles began to explode in 2022, doubling to 7.003 million units, completing the national planning target three years ahead of schedule, and this year, new energy vehicles continue to maintain the momentum of high growth, the first five months of automobile production and sales were completed 10.687 million units and 10.617 million units, an average annual growth of 11.1%, of which new energy vehicle production and sales were completed 3.005 million units and Among them, the production and sales of new energy vehicles completed 3.005 million units and 2.94 million units, up 45.1% and 46.8% year-on-year respectively, and the market share reached 27.7%, so the development momentum continued to remain strong.

(2) Nio Motors has led the new energy industry in the past five years and is likely to grow at a high rate again this year

In the past five years, the new car maker "Wei Xiaoli" has been growing relatively fast in the new energy industry, with Nio increasing from 11,300 units to 122,500 units, ten times faster than the industry growth rate (5.5 times in five years).

According to Nio's plan, the company will deliver four new vehicles (including the new ES6) in the second quarter of this year, and the fifth new vehicle this year will be delivered in July, which is one month later than the initial target of delivering five new models (including the new ES8, ES6 and EC6) in the first half of 2023, which, in the words of the management, is to ensure the quality and marketing rhythm of the new vehicles when they are launched and give each new vehicle More time for each new vehicle.

By July this year, Nio will have 8 models on sale at the same time, and the management predicted at the beginning of the year that Nio's sales target for 2023 would double from 2022, or more than 245,000 units, but only 43,854 units were sold in the first five months, a big gap from the target of 245,000 units. It is hard to say whether the market demand will buy it, so we hope the expansion can bring sustained high growth.

4、Summary

In general, Nio Motors, as an important representative of Chinese high-end brand of new energy vehicle manufacturing force, continued to lose money in the first quarter of this year, although the car sales in the first quarter were growing, with a year-on-year increase of more than 20%, but due to the increased competition pressure of new energy vehicles, Nio Motors sales in the second quarter began to appear weak, according to the management's estimate of 23,000 to 25,000 units have been negative year-on-year growth, even with the impact and stimulation of new car launch in the second half of the year, it is unlikely to complete the doubling target. Even with the impact and stimulation of the new vehicle launch in the second half of the year, it is unlikely that the target of doubling will be accomplished, and this year is likely to end in a loss. With the ability to effectively prevent user mileage anxiety, as well as multi-brand operations catering to different customer needs and other comprehensive advantages, I believe that next year is likely to be able to achieve the important goal of break-even as stated by the management, and then build up strength to take off.

The above is only the basis for personal investment stock thinking and value investment, are subject to the possibility of error in judgment and the risk of incomplete thinking, does not constitute any investment advice, not responsible for anyone's profit and loss, remember!!!!

@Daily_Discussion @MillionaireTiger @CaptainTiger @MaverickTiger @Tiger_chat @TigerStars @VideoLounge