Wei Lai: Analysts said that despite the shortage of chips, delivery this year may double
Chinese electric vehicle company NIO (NIO) will release its first-quarter earnings report on April 29. Mizuho Securities analyst Vijay Rakesh expressed optimism, rating the stock as “buy” with a target price of $60. (To view Rakesh’s history, click here.) As the analyst suggested in his recent report, with the increase in production of ES8 and EC6 SUVs, NIO’s deliveries in March were year-on-year This has increased five-fold to approximately 20,1
00 vehicles. -Much faster than the 16% production growth of the global automotive industry or the 77% growth of China’s unit sales. NIO’s sales exceeded its own forecast of 19,500 deliveries. Although the semiconductors needed for automobile production are well known and there are supply problems across the industry, Rekes believes that even if production slows down in the recent second quarter, the company’s sales may still “maintain strong growth. Until 2021″, it will roughly double by the end of the year. The industry is solving problems in its semiconductor supply chain. Rakesh predicts that deliveries will reach 87,000 vehicles this year, 141,000 vehicles in 2022, and 223,000 vehicles in 2023. Analysts said that helping NIO maintain this strong growth trend is the company’s leading position in the “Chinese battery replacement station”, where EVs run out and batteries can be charged-or shut down fully charged batteries within minutes. (Since NIO sells cars separately from batteries and provides the latter “as a service”, battery exchange has been included in the price of the battery). Rakesh estimates that the cost of NIO to build a battery exchange station is between US$450,000 and US$1.5 million, and an additional US$300,000 is spent on storing batteries on NIO, although both of these costs will fall in the future as the entire industry implements “standardization”. . And government policy. Rakesh pointed out that in the next four years, NIO plans to develop from about 500 gas stations before the end of this year, and will eventually cooperate with China’s state-owned oil company to build up to 5,000 such battery exchange stations and natural gas Giant Sinopec. The analyst further pointed out that NIO will allow owners of Ford Mustang E electric vehicles to use their battery charging stations, thereby expanding NIO’s customer base and “helping NIO amortize the cost of battery stations more quickly.” For NIO, what does all this mean for dollars and cents? Rakesh estimates that Weilai Automobile will generate 5.2 billion U.S. dollars in revenue this year, with a loss of 0.29 U.S. dollars per share, but by 2022, revenue will increase by 85% to 9.6 billion U.S. dollars and achieve its first profit ($0.14 per share) that year. Although the company will begin to turn losses into profits in 2022, the analyst chose a target price of $60, not based on earnings, but based on a valuation of 8.8 times expected sales in 2022. (Perhaps because NIO’s market value is “428 times the expected earnings in 2022”, which sounds a bit too rich.) In any case, by 2023, analysts believe that revenue will increase by another 73% to $16.6 billion. Profits increased six times to $0.88 per share. Assuming that NIO reaches these numbers, its P/E ratio based on 2023 earnings will drop to a more palatable 68 times earnings. Nio has strong support elsewhere on Wall Street. Unless you own 3 stocks, all the other 6 analysts who have commented in the past 3 months recommend this stock as a buy stock. A medium buy consensus rating and a price target of $62.30 mean that there is 72% upside potential at the current level. (See NIO stock analysis on TipRanks). To find a good idea for electric car stocks that are traded at attractive valuations, please visit TipRanks’ “Best Stocks to Buy”, a newly launched tool that can All the stock insights from TipRanks are combined. Disclaimer: The views expressed in this article are only those of the analyst. The content is for reference only. Before making any investment, it is very important to conduct your own analysis.