NIOtime #21: Why NIO up 10% this week?
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 48 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 1,624 NIOtime community by subscribing here!
Dear NIOtime gang,
It’s NIO time, Blue Sky is here!
We are here again delivering the weekly updates from NIO this week. First, NIO has announced the closing of $1.5 Billion convertible senior notes on Jan 19, 2021. Let’s recap the balance of cash, and cash equivalents, restricted cash, and short-term investment were RMB22.2 billion (US$3.3 billion) as of September 30, 2020, from the Q3 report. Added cash raised from the second offering of $3.05 Billion (Dec 20) and $1.5 Billion (Jan 21), NIO now has $7.85 Billion on its hands.
In our opinion, NIO is in much better shape and has more flexibility to expand its capabilities, conquer more EV market share and deploy new advanced technology. Some investors expressed disappointment over the NIO’s stock price moving sideways recently, and here’s our view on NIO is don’t expect another 10x like last year and reiterate our price target of NIO at $96 by year-end. NIO indeed has a wild ride last year which many investors gained more than 100% in their investment. If you are long term holders, all we need to do is HODL, and our patience will get paid eventually.
Fundamentally, NIO is on the right track and slowly benefiting from its premium top-down approach like Tesla started with premium cars.
Technical Chart
This week NIO closed the week at $61.95 which is about 10% higher than last week’s closing price ($56.27). This week NIO has been moving sideways until Friday which NIO jumped high likely with the new analyst initiation from Nomero with a Buy rating.
NIO managed to defense its last week EMA8 ($57.92). Now the NIO’s technical chart is looking good with the stock above EMA 8 and EMA21 lines. Next week let’s see if NIO can test its previous high at $66.99 with the catalyst of January delivery vehicle expected on first week of February.
This Week’s Top 6 Highlights by @theNIOtime
NIO EC6 wins best Score in China Insurance Car Safety Test
NIO Life and Shanghai Wine Exchange reach Strategic Cooperation
Nomura analyst upgrades NIO Price Target
"0 Down Payment" Limited Time Promotion
NIO Power Update
NIO House & Space Update
News
NIO EC6 wins best Score in China Insurance Car Safety Test
On January 21, 2021, the results of the China Insurance Car Safety Index were released. The NIO EC6 achieved excellent results across the board, with an excellent (G) evaluation in three key indices: "Interior Occupant Safety Index," "Exterior Pedestrian Safety Index" and "Vehicle Assist Safety Index," with zero defects in the frontal 25% offset collision and side-impact. The EC6 also received a good (A) rating in the "Crashworthiness and Maintenance Economy Index", which does not generally perform well by luxury brands. (News & Photo Source: NIO App)
Safety – it is not surprise to witness NIO has recognized as the most safety car in the test. We viewed this would boost NIO firmly as premium EV brand recognition with extra safety demonstration. This safety recognition would put NIO competitive with BBA premium models directly. One reason of buying premium car is their reputation for safety, now NIO is verified by its safety feature. We think this would boost potential customer’s confidence to consider NIO instead of BBA models while considering clean energy vehicle option.
NIO Life and Shanghai Wine Exchange reach Strategic Cooperation
On January 18, NIO Life and Shanghai Wine Exchange officially reached strategic cooperation to launch NIO BAR Club.
Shanghai Wine Exchange was approved by Shanghai Municipal People's Government. It is the first electronic wine trading platform in China and the first wine trading center in Asia, with more than 3,000 winery resources.
The cooperation between NIO Life and the Shanghai Wine Exchange brings a wide range of wines from Lafite, Margaux, and products from the Bordeaux region in France and Veneto in Italy. NIO owners can buy the wine at an exclusive price.
NIO Life can ensure that its products are authentic and traceable by sourcing directly from the wineries and eliminating the wholesaler chain.
NIO Life has launched a wine evaluation system created by professional sommeliers and user tasters。 The wine's retail price is added to the evaluation system, and a total of 13 criteria are given in four dimensions: sight, smell, taste, and value ratio. (News & Photo Source: NIO App)
We have mentioned about NIO Life in our past issues. This time NIO Life is partnering with Shanghai Wine Exchange to launch an unique experience for NIO users who are wine lovers as well as attracting potential customers who are wine lovers. In our views, NIO understands its targeted market segment very well by launching a series of partnerships with locals to provide premium lifestyle to NIO users.
Nomura analyst upgrades NIO Price Target
Nomura analyst Martin Heung initiated NIO coverage with a buy rating of $80.30 price target, which implies a potential 30% upside.
Heung wrote in a commentary cited by Bloomberg, it has a “Tesla-like top-down approach in launching its EV pipeline -- starting with its luxury flagship model ES8, followed by more consumer-friendly models and variants, i.e., ES6, EC6.”
NIO has entered the realm of a premium auto brand, "given car buyers are willing to pay the price similar to those for entry-level models of major European luxury original-equipment-manufacturers," Heung said, according to The Fly.
Heung believes NIO's battery-leasing program "paves the way for the revolutionary concept of battery swapping." He looking forward to NIO to “outperform other domestic ‘masstige’ automakers, which are often associated with poor quality and tackiness.”
According to Martin Heung, NIO positioned from 250,000 to 350,000 yuan ($38,500 to $54,000), representing the most popular price range for the mid-to-high-end EV market in China. (News Source: Business Insider)
Nomura analyst has initiated rating of NIO and quoting a relatively high price target for NIO. NIO is getting attention from more analysts. This is good exposure for NIO as new analysts give recommendation to its clients. The logics provided by the analyst is already known to our community, a top-down model with high user recommendation and premium brand recognition.
4."0 Down Payment" Limited Time Promotion
From January 20 until February 28, customers who purchase the new ES8, ES6, and EC6 can choose the "0 down payment" purchase plan, an annualized rate of 2.99% for 36 terms. After purchasing Service Free or vehicle insurance, the buyer can take the car home.
For example, if the buyer purchases the ES6 Sport Edition 100kWh priced at RMB 416,000 before subsidy, the amount of subsidy is RMB 18,000, and another RMB 128,000 deduction after choosing BaaS battery rental. The monthly payment would be RMB 7,567, and the battery rental service fee is RMB 1,480.
Besides, NIO adjusted Lifetime free power exchange benefits.
For customers who purchase the new ES8, ES6, and EC6 from January 22, 2021, the lifetime free power exchange benefits will be adjusted to the following scheme.
For customers who do not choose the exclusive pile entitlement.
6 free monthly battery exchanges will remain unchanged.
For those who choose the exclusive pile option.
Upgrade from charging electricity for 6 monthly electricity exchanges and no service fee to 4 monthly electricity exchanges completely free of charge. If the number of exchanges exceeds the above, the full cost of the exchange will be charged. (News & Photo Source: NIO App)
We observed a series of sales policy revision with more attractive offering to target new customers that are considering NIO cars. For your knowledge, according to China’s auto loan policy, the minimum down payment for the car is usually 20%, with a loan term of 1-5 years. This will promote sale indirectly with no downpayment ahead. In other hands, we think that NIO is trying to catch up with demand. This is good as NIO will try its best to boost its sales demand.
NIO Power Update: 101-102th Power Charger
NIO has 168 power swap stations and two new Power Charger stations, which sums up 102 power charger stations in China. The second-generation Power Swap is expected to be launched in March or April, according to the co-founder of NIO mentioned in the EV summit last week. (News Source: NIO App)
NIO Power Charger #101 | Hangzhou Xixing Gonglian Supercharging Station
NIO Power Charger #102 | Shanghai Hongqiao Fuli Supercharger Station
NIO House & Space Update
NIO has no new House and Space launching this week. For older photos, please kindly refer to our NIOtime Facebook photo albums here. (News Source: NIO App)
Summary
NIO has relatively strong cash on its hands compared to last year, and after thru last year’s roller-coaster, NIO would appreciate cash deployment in critical areas. In terms of demand, NIO is aware of this and willing to offer much more attractive benefits to new NIO users for purchasing the car at this moment. In the long term, NIO is on the right track to gain traction in the premium EV segment in China and eventually expand to the international market. There are rumors online quoting another breaking high record for January delivery vehicles.
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.