NIOtime #15: Let's Look Beyond 69M Secondary Offering

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

This week let’s welcome 100 new members to join us on board to grow together with NIO! If you’re reading this but haven’t subscribed, we invite you to join the 1,302 NIOtime community by subscribing here!

---

Dear NIOtime gang,

It’s NIO time, Blue Sky is here!

Happy weekend! We have a mixed feeling about what was going to NIO this week. Finally, following the EV brand’s secondary offering: $LI, $XPEV, $TSLA, NIO announced their 2nd-time secondary offering this year on Thursday aftermarket. The good part for NIO is they can raise at least 3B in cash to their war chest, while the not-so-bad part is for us, NIO long-term investors who believe NIO since the beginning. Our shares are getting diluted for the sake of the bright blue sky. For growth startups like $NIO, we would probably see more stock offerings in upcoming years until they can self-sustain, getting a consistent place in EV races. Alright, let’s look beyond the 69M secondary stock offering. This week we have a few overlooked NIO products that not many media are covered.

Technical Chart

This week NIO closed the week at $41.98 which is about 2.46% lower than last week’s closing price ($43.04). NIO experienced major selloff after the market on Thursday when the 69M secondary stock offering news was annoucened.

From the technical chart, NIO is about to cross on EMA8 and EMA21. The cross over point between EMA8 and EMA21 would signal a confirmed downward trend for NIO. Now NIO is off from EMA21 ($44.91) and EMA8 ($45.05) and these two price levels can serve as short term resistance for NIO to break through. The downward levels we would watch closely is lower BB band ($39.88) and MA50 ($37.11).

At the moment the chart looks bear flaggy here. It may need some time for pullback or consolidating sideways to digest the 69M stock offering news. However, we still have some positive catalyst ahead. Let’s invest safe and look at the long term timeline.

This Week’s Top 7 Highlights by @theNIOtime

1. 69M Secondary Stock Offering

2. NIO Radio Two Year Anniversary

3. NIO Car Mall + iQIYI Video Streaming Membership

4. NIO Ranked 2nd in November Premium Car Insurance Registration

5. NIO Blue Sky Club - Celebrating NIO 6th Birthday Above Blue Sky

6. NIO Power Update: 83-84th Power Charger

7. NIO House & Space Update: 195th NIO Space

---

News

1. 69M Secondary Stock Offering

NIO Inc. announced the second round of stock offering that sums up to 69,000,000 American depositary shares (the “ADSs”) on 10th December 2020.

The Company plans to use the net proceeds from the ADS Offering mainly for

1. research and development of new products and next generations of autonomous driving technologies,

2. sales and service network expansion and market penetration and

3. general corporate purposes.

The offering price is not yet annouced and is likely expected to be a discounted price based on Thursday’s market close. Many of long term investors may have mixed feelings including us as we were expecting Li Bin to keep his words, however, this is the reality of the capital game between EV makers to raise funds, expand R&D expenses, and conquer further EV market share.

NIOtime @theniotime

Although slight disappointment over Li’s saying: no offering in short term during earning call. We understand this is the realistic for capital market which enterprise seeks opportunities to offer, expand and conquer further EV market share. Stay long for long term. Cheers $nio

Edison Yu @edison__yu

$NIO >$2.5bn offering no surprise after $xpev $li deals; it's opportunistic and does need the cash Proceeds mostly for R&D of new products and autonomous driving (60%) and expanding sales/service network (30%). Note: 64% customer referral rate through Oct vs. 52% last year

Many investors may have a few questions:

1. How does this going to impact the stock price in near term?

Without a doubt, we expect a pullback on the share price which is already observed in the Thursday aftermarket and continue downward trends on Friday. Once the stock offering is completed, we shall expect the stock price bounce back to its previous point. You may refer the stock chart above of NIO during its first secondary offering on August.

2. What are next after proposed stock offering annoucement?

We will expect NIO to annouce the price for the stock offering next week as well as a stock offering completion notice. According to August Stock Offering, we would expect the stock offering completion annouce within 2 days of the price notice.

As a long term investor, we are not concerned about the short term fluctuation but need to be aware of stock offering events and the usage of proceeds. In general, we would want the company spending the proceedings wisely especially on R&D areas in enhancing the technology edges and innovation car platform as well as increasing war chest to prepare themselves in upcoming significant three to five years competing the other EV brands. In addition, we want NIO to expand outside of China and get more international NIO users like us on board to buy, testify and promote NIO in future.

2. NIO Radio Two Year Anniversary

NIO Radio launched on December 5th, 2018. NIO Radio is the world's first user-generated connected car radio community; it is a radio station for NIO users. NIO Radio is always online 24 hours, seven days a week. More than 60,000 vehicles listened in these two years, a total listening time of 2180565 hours, and a weekly listening per capita of 481 minutes. (News & Photo Source: NIO App)

You may not aware that NIO has its own brand of radio channel - NIO Radio. This is like SiriusXM in USA, broadcasting premium podcast and songs for in-car entertainment.

NIO Radio is probably the most overlooked product from NIO investors. The importance of sound in the car as a mobile space has been generally recognized, but is more reflected in the car music app and voice assistant products. NIO Radio utilizes audio content, user connection, emotional experience to create a warm sound community, forming an important entrance for NIO users and non NIO users to connect with NIO.

We think this is a smart strategic by NIO to trust its users and let users to manage NIO Radio for brand promotion and marketing. Imagining this scenario, I am a NIO user and I may pick up non-NIO users occasionally. NIO Radio is good entrance for my friends and family who have not owned NIO cars yet to feel and understand the magic of NIO community.

3. NIO Car Mall + iQIYI Video Streaming Membership

   

NIO Car Mall partners together with iQIYI, one of the largest online video sites in China, for the first time to bring video streaming services to NIO users in the car. (News & Photo Source: NIO App)

Without a doubt, there are many potential partnerships and imaginations across the smart electric car platform. This is just one of the examples we observed last week in NIO App. Now NIO users can enjoy in-car video streaming services by subsribing to iQIYI. iQIYI ($IQ) is like Roku ($ROKU), Netflix ($NFLX) in USA, they do provide movies, opera soup dramas, animes, short clips and etc.

We think that in-car entertainment ecosystem is another huge potential that we tend to overlook. To illustrate this, let’s imagine car as four wheels on smart phone, with even higher price. In your smart phone, you tend to download or even purchase a lot of interesting apps that can enhance your user experiences. And smartphone brand like Apple ($AAPL) is the winnter to create such App Store platform for third developers to create better experience for iphone, ipad and mac users. Similarly, we will see many smart integrations that is currently not in ICE in-car ecosystem near future. This is another reason we would switch to EV car in near future for the better in-car entertainment ecosystem.

In summary, all three parties (NIO, iQIYI, NIO User) will benefit from this partnership. NIO may get a pie of advertisement and refferal fee from iQIYI, iQIYI gets to increase its user base, NIO User enjoys the video streaming services at discounted price and enhance their in-car entertainment experience. This is a win-win-win situation for all and we would expect more partnerships like this integrating to in-car entertainment systems such as shopping, restaurant and hotel booking, and many more.

4. NIO Ranked 2nd in November Premium Car Insurance Registration

   

NIO is ranked 2nd after Tesla with 5,205 premium car insurance registration, surpassing both Audi, BMW, Porsche, Volvo, Benz, Lexus (News and Photo Source: NIO App)

Congratulations again for NIO to rank 2nd in premium car insurance registration data provided by Catarc, a data research company focusing on automotive industry. This is a reliable source and why this matters to us as NIO investors.

As a group of investors, we would want to invest in a integrity, excellent and great product company, however, China companies has bad reputation in the past for the case of Luckin Coffeee. In our view, we think that one bad example doesn’t reflect all of China companies are bad companies. In western countries, we have the Wirecard and Enron scandals. Asking yourself, does this two discount your belief in other good American companies and European companies? Not right, but why this is the case for Chinese companies.

We think that’s mainly due to language barrier that led to ineffective information communication. For American and European companies, you have no trouble in accessing the company for doing additional due diligence. This is not the case for Chinese companies, there are actually a lot of reliable sources that can further strengthen the conviction. This is also one of NIOtime’s missions to close the language gap between NIO and NIO investors, bringing you the authentic information about NIO.

In our view, there is likely lower chance and expansive option for EV car companies to falsify their auto sales record. We can check this stats with insurance registration companies. As long as the total insurance registration is not deviated too much from reported delivery vehicle number, the EV company is good.

5. NIO Blue Sky Club - Celebrating NIO 6th Birthday Above Blue Sky

NIO celeberated its six year birthday last November. Here we think this is the most unique way for NIO sixth birthday celeberation. The photo and video source are proudly from NIO App. The credits goes to NIO Blue Sky Club, a part of NIO User Trust and a user club devoted for NIO users who are in aviation industry. Even Li Bin and Qin LiHong commented that this is cool and fancy. Highly recommend to watch the video below.

We, as a group of NIO investors, are thrilled to see how dedicated NIO users to NIO and amazed by the magic of NIO influences on NIO users to do this voluntarily without any expectation, but wish NIO better and better. Bravo for your dedicated passion for sharing NIO above Blue Sky.

6. NIO Power Update: 83-84th Power Charger

So far, NIO has two new Power Charger stations, which sums up to 84 power charger stations in China. (News Source: NIO App)

NIO Power Charger #83 | Blue Ganwang, Beijing

NIO Power Charger #84 | Jindi Plaza, Beijing

7. NIO House & Space Update: 195th NIO Space

This week NIO has one new NIO Spaces launching this week which sums up 195 NIO houses and spaces in China. (News Source: NIO App)

NIO Space #195 | Huacai Tiandi, Nanjing

Summary

In conclusion, this week’s takeaway for NIOtime is “ let’s look beyond the 69M secondary stock offering”. In fact, NIO has so many overlooked products, as you read above. We will continue to dig into NIO App and bring to you more under-coverage products that aren’t covered by traditional media. We will try our best and aim to bridge the language gap that led to misinformation between NIO and NIO investors. As long as the fundamentals of NIO has not changed much, we will just HODL it.

Source: Online

We will periodically post quick updates on our NIOtime Instagram, NIOtime Twitter, and NIOtime Facebook. Please follow us on social media to interact with us and let us know your thoughts and suggestions.

If you like what NIOtime is sharing about NIO, please help us share and grow the community to let more people know about NIO.

**Currently we have trouble to share our post link on Facebook NIO groups, if you are in any NIO fan group on any social media, we would highly appreciate your efforts to share our weekly post.**

We are a group of NIO global investors and fans who are volunteering to gather news and comments to keep everyone in the community updated with NIO.