Analyst Note| Vincent Sun |
Nio’s first-quarter revenue was close to the low end of its guidance. Vehicle margin declined 13 percentage points year over year to 5.1% due to product mix change and promotions on older models. However, management indicated that vehicle margin will stage a sequential recovery in the second half on better product mix. With enlarged losses on softer vehicle margin and rising operating expense ratios, we increase our net loss forecasts for 2023-24. We reduce our fair value estimate to USD 14.00 per ADS (HKD 108 per share) from USD 15.50 (HKD 120). Our fair value implies a forward price/sales ratio of 2.6 times.