BOC International released a research report stating that it gave NIO SW (09866) a “buy” rating. In the fourth quarter, batch deliveries began with Ledao. It believes that there is still room for improvement in the gross margin of automobiles. The target price for H shares is HK$59.88.
The company's revenue for the second quarter was RMB 17.5 billion, up 98.9% year on year and 76.1% quarter-on-quarter. The gross margin of automobiles was 12.2%, higher than the bank's forecast of 10% to 11%. The main reason was the reduction in bicycle costs due to the renegotiation of supplier procurement contracts for the next quarter, while discounts and concessions narrowed slightly. As sales improve quarterly and promotions narrow, the bank believes that NIO has reached an inflection point, and automobile gross margin will improve further in the third quarter.