NIOtime #5: Why NIO has soared 5.3% in September?

Technical Chart. Media News Recap. NIO App Stories. All from a group of NIO global fans exclusively for the NIO community.

Oct 03, 2020

Welcome the 41 new NIOtime people who have joined us since yesterday after the NIOtime Estimate #1 post! If you're reading this but haven't subscribed, now's the time to join our growing family of 474 NIOtime gangs.

Greetings,

In case you missed our NIOtime estimate #1, you may read about our 99.5% accuracy estimate for the September vehicle delivery number. Another quick update on some exciting numbers, we wish to share this with our NIOtime community. Last week NIOtime received excellent responses (3500++ views, 190++ signups, eight shares, 45% open rate) from the public on the first special issue on NIO major updates during Auto Show China 2020. Thank you for your support and appreciation for the NIOtime.

It’s NIOtime, Blue Sky is Limitless!

Let's get started our issue with the NIO's technical chart for this week.

Technical Chart

First of all, congratulations for those who hold NIO as long term investor. This week NIO broke through US$20 resistance zone and hit 52W high at US$22.59 on Wednesday. This week NIO was in the range between US$22.59 and US$18.53 and closed at US$ 21.18.
In general, NIO stock performs very well compared to the major three indexes. Now the resistance zone is built on previous high around US$21.05. Buy the rumor and sell the news - this was what happening to NIO stock despite a very strong beat on its September vehicle delivery number yesterday. Right now, the market sentiment is looking for next momentum news in October. We shall expect the stock entering in another phase of correction (testing EMA8 (US$20.29) & EMA21 (US$19.11) and consolidation for next few weeks.

September '20 Review

This week NIOtime is taking a step back and reviewing how's NIO rallying past three significant indexes in September. We are thrilled to witness NIO staying strong (5.3% MoM) despite the general downturn of major indexes (DOW:-3.4%, NASDAQ:-5.15%, S&P: -7.2%).

Instead of reviewing last week's highlights, we will recap the significant September events, NIO Power monthly overview, NIO House monthly overview, and NIO September actual delivery number vs. NIOtime estimate. A monthly review to look at how NIO doing in the past month is recommended for long-term investors. In this way, we are not swimming blindly in this full of noise world but instead focusing on the fundamental and growth metrics for NIO to check our conviction regularly.

This Month's Four Items Reviews

Major September Events
NIO Power Overview (Power Swap & Power Charger)
NIO House Overview (NIO Space)
September Vehicle Delivery Number vs. NIOtime Estimate

1. Major September Events

We were excited to witness the promised delivery of EC6 this month. Mr. Li Bin debuted the EC6 model at the last NIO day and promised to deliver the model in September 2020. Another major event is the announcement of the NIO NOP update and Power Up Plan at China Auto Show 2020 last week. In September, referring to NIOtime's analyst rating thread, NIOtime recorded one analyst rating initiate (Deutsche Bank - Buy with US$24 PT) and another analyst upgrade (Credit Suisse - Outperform with US$25 PT from US$17.50). This week's rally was partly due to bullish comments by Deutsche Bank analyst as well as high anticipation of the September vehicle delivery number.

2. NIO Power Overview (155 Power Swap & 64 Power Charger)

In September, NIO continues to expand its Power Swap (battery swapping stations), with 155 of them completed, providing users with nearly one million battery swapping numbers. Besides, NIO installs up to 64 of Power Chargers over the country. In fact, NIO launched a total of 27 NIO Power facilities (12 Power Swaps & 15 Power Chargers) this month, a new highest monthly installation record. (News & Photo Source: NIO App)

3. 167 NIO House & Space Overview

As of today from NIO App, NIO has opened 167 stores across the country, including 22 NIO Houses and 145 NIO Spaces, with a sales network covering 93 cities. The expansion of the sales network is still in full swing. Last week there are 15 new NIO Spaces launched in multiple cities. According to news dated January 16, Wei Jian, NIO's Vice President of User Operations, commented that NIO is looking to expand its NIO House and NIO Space to around 200 by the end of 2020. (News & Photo Source: NIO App)

NIO House is “a space for NIO’s users and friends, a joyful lifestyle beyond the car”. More than a room to display the company's products, a typical NIO House is simultaneously a coffee shop open only for its users, a daycare center, a library, and a meeting room and places for other social activities.

On the other hand, NIO Space covers a smaller area (fewer than 200 square meters) at a lower investment cost (an average cost of under RMB1 million). It mainly serves as a showroom for sale that facilitates users who are interested in NIO's products while living in cities without NIO Houses.

One fun fact for you today is that some NIO Spaces are wholly funded and operated by NIO, and some are co-built with local partners who are usually NIO users.

4. September Vehicle Delivery Number (4,708) vs. NIOtime Estimate (4,688)

NIOtime estimated at this issue about 4,688 vehicles to be delivered while the official announcement was at 4,708 vehicles, which means our estimate was only off by 20 units with 99.5% accuracy. The public survey with an average of 4,730 vehicles was also closer by 22 units. Kudos to the NIOtime estimate team and those who participated in the public surveys.
NIO delivered 1,482 ES8, 3,210 ES6 (first time exceed 3,000 units), 16 EC6 in September 2020, increasing by 133.2% YOY. As expected, this is the highest monthly delivery for NIO and the seventh consecutive month of year-on-year growth since March 2020.
NIO delivered 12,206 vehicles in three months ended September 2020, increasing by 154.3% YOY, beating given Q3 guidance (11,000-11,500), and recording the highest quarter delivery.
NIO delivered a total of 26,375 vehicles in 2020, increasing by 113.7% YOY, with deliveries in the first three quarters of this year already exceeding those of the previous year.
NIO began deliveries of the EC6 in late September 2020 and cumulative deliveries of ES8, ES6, and EC6 as of September 30, 2020 reached 58,288 units.

Summary

In summary, September 2020 is a solid month for NIO to justify its stock rally of 5.3% in a month. NIO proves the world what the brand capable of promoting premium electric vehicles as a truly user brand with a strong emphasis on engaging lifestyle. Indeed, the number of 4,708 vehicles delivered at least signals NIO is pushing hard on its supply chain constraint and production capability of 5,000 each month. Last, there are a few questions NIOtime looking to pay attention in October:

1) How would the revision of free lifetime NIO Power Swap benefits affect NIO's demand?

2) How many new vehicle orders acquired through the multiple auto shows during the past week?

3) Can NIO's current production capacity be pushed further to meet with the upcoming high demand of the Q4 quarter when the car sales are typically in the last three months of the year?

Please feel free to let us know your opinions on NIO's outlook in October below. We will read and reply to them one by one.

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