Nio's CFO change won't disrupt current operations, says Morgan Stanley

Nio announced a CFO change last week, and in one Wall Street analyst's view, the internal transfer should ensure smooth transition.

A C-level change is rarely good news, but Nio's recent solid operation should help ease market concerns, thus preventing any panic knee-jerk reaction, Morgan Stanley analyst Tim Hsiao's team said in a Jul 5 research note.

"We don't expect this change to disrupt Nio's current operation or future fund-raising plans, if any," the team wrote.

Nio announced earlier on Jul 5 that Steven Feng had resigned as CFO for personal and family reasons, effective that day.

Nio's board of directors had approved the promotion of Mr. Qu Yu, or Stanley Qu, senior vice president of finance, as the new CFO.

Since joining Nio in Oct 2016, Qu has demonstrated strong expertise and leadership in overseeing the company's overall financial and reporting functions, Nio said.

Feng joined Nio in Nov 2019, and prior to that he was a managing director and head of the auto and parts research team at CICC.

Additionally, Morgan Stanley said their recent channel checks show that Nio's order book has been stabilizing at a run rate of about 5,000 units per week.

"With improving mix/scale and reduction in promotions for certain models, we expect 2Q GPM to meet the company's guidance of double digits, or our expectation of low teens," the team said.

Morgan Stanley said the Onvo L60 remains a more crucial stock catalyst, with official deliveries of the model expected on Sep 10.