Weilai NIO's financial report is not good? If there is a subsequent decline, where is the chance to enter the market?

Stock code: $NIO Inc(NIO.US)$

On September 7, 2022, before the US stock market, NIO Auto released its financial results report for the second quarter of 2022. Financial reports show that NIO Q2's revenue reached 10.29 billion yuan, higher than market expectations of 9.667 billion yuan, up 21.8% year on year. There was positive year-on-year growth for nine consecutive quarters. Net loss attributable to common shareholders of the company was 2.74 billion yuan, up 316.4% year on year, and 50.4% month on month.

The vehicle sales revenue side of the main business was 9.57 billion yuan, up 21% year on year, but gross profit was 1.34 billion yuan, down 14.8% year on year. In terms of vehicle delivery, Q2 NIO delivered 2,559 vehicles, including 3,681 ES8s, 9914 ES6s, 4,715 EC6s, and 6,749 ET7s. The number of vehicles delivered increased by 14.4% over the second quarter of 2021 and decreased by 2.8% from the first quarter of 2022.

It is worth noting that NIO's gross margin continued to decline this quarter. However, the company attributed the decline in gross margin to falling vehicle gross margin and expanding investment in energy and service networks. The Q2 gross margin was 16.7%, which is far lower than 18.1% in the previous quarter and 20.3% in the same period last year. In addition, NIO's R&D expenses also increased significantly this quarter. The company said the related increase was mainly due to increased personnel costs for R&D functions and increased design and development costs for new products and technologies. Q2 R&D expenses were RMB 2.149.5 billion, up 143.2% from the second quarter of 2021 and 22.0% from the first quarter of 2022.

In terms of financial reporting guidelines, NIO currently expects revenue of 12.85 billion yuan to 13.6 billion yuan for the third quarter, which is lower than market expectations of 16.23 billion yuan.

Therefore, this financial report can be summed up as NIO Auto's second-quarter revenue exceeded expectations, but the company's quarterly gross profit continued to decline month-on-month. Net loss reversed the narrowing trend of the previous quarter and expanded sharply to 2.7 billion dollars, and the third-quarter earnings guidelines fell far short of market expectations.

Looking at the stock price trend, NIO is currently still in a downward trend channel from a high of 62 prices in February 2021. In the short term, we can see that this stock is in the 13-24 price range. Breaking through any price point thereafter is very important for NIO's subsequent trend, because we can wait patiently for its stock price to break through. If it breaks through the 24 price level, it is also expected to break through the downward trend that has lasted a year and a half, so it is of great significance.
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Keep in mind the three principles of CHIVEST chives: 😍
✅ Operate without reversing the trend
✅ Don't follow the trend and buy stocks
✅ Don't buy stocks you don't understand
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Disclaimers
This analysis is provided by the CHIVEST team. It only represents the team's analytical suggestions and does not serve as a basis for trading. Entering the market is risky. You need to be careful when investing; please bear the risk yourself. All rights reserved, and any copying or unauthorized misuse must be investigated.