Nio Inc (NIO)

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NIO stock swings lower after reporting losses that were much wider than expected
By: Morningstar | March 2, 2023

XPeng stock also reversed lower after the EV maker reported February deliveries that fell from a year ago, while Li Auto shares rallied

Shares of NIO Inc. reversed course to trade sharply lower Wednesday, after a much-wider-than-expected loss and revenue that fell well short of forecasts overshadowed investor optimism over the outlook for shares of other China-based companies.

Meanwhile, shares of rival electric vehicle makers XPeng Inc. (XPEV) also reversed lower after delivery data, but Li Auto Inc. shares (LI) gained ground as China's stock markets surged following strong economic data and after Hong Kong lifted its mask mandate.

NIO's stock (NIO) had traded up about 7% in Wednesday's premarket, just after the electric vehicle maker reported results, but ended down 6.0% at $8.82, the lowest close since July 1, 2020.

The company reported very early Wednesday a fourth-quarter net loss that more than doubled to RMB6.00 billion ($861.9 million), or RMB3.55 per American depositary share (ADS), from RMB2.22 billion, or RMB1.36 per ADS in the year-ago period.

Excluding nonrecurring items, the adjusted loss per ADS of RMB3.07 was wider than the FactSet loss consensus of RMB1.83.

Vehicle margin contracted sharply to 6.8% from 16.4%, due in part to inventory provisions, accelerated depreciation of production facilities and losses on purchase commitments for existing ES8, ES6 and EC6 models.

Deliveries jumped 60% from a year ago to 40,052 EVs, consisting of 20,824 electric sport-utility vehicles (SUVs) and 19,228 electric sedans.

For the first quarter, NIO expects revenue of between RMB10.93 billion and RMB11.54 billion, below the current FactSet consensus of RMB17.38 billion, and deliveries of between 31,000 and 33,000 EVs, up 20.3% to 28.1% from a year ago.

"2022 was a year of decisive investments and accelerated global market entry for NIO," said Chief Financial Officer Steven Wei Feng. "In 2023, we will focus on improving our execution efficiency, and work in an agile and efficient mode to embrace the competition in the global electric vehicle market in the long run."

Meanwhile, XPeng's stock closed down 0.7% at $8.86, to erase an intraday gain of as much as 3.7%. The company said it delivered 6,010 EVs in February, up 15% from January, but down 3.5% from a year ago. The company is slated to reveal fourth-quarter results on March 17.

And Li Auto shares climbed 3.8% to $24.51, paring an intraday gain of 6.2%, after the company reported February deliveries of 16,620 vehicles, up 9.8% from January and 97.5% more than it delivered a year ago.

Earlier this week, Li Auto reported profit that beat expectations but revenue that missed.

Over the past three months, NIO shares have tumbled 32.8% and XPeng shares shed 22.6%, while Li Auto's stock has hiked up 7.6%. In comparison, U.S.-based rival Tesla Inc.'s stock (TSLA) has gained 4.1%, the iShares MSCI China exchange-traded fund (MCHI) has advanced 4.1% and the S&P 500 index has lost 3.0%.

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