China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

[Blue Lotus EV Sector Update]: All Solid-State Battery Unlikely to Disrupt EV Market

[NIO (NIO US, BUY, TP US$13) Target Price Change]: Late Delivery of Key Models Hurts 1H23 Momentum

[NIO Inc. (NIO US) Rating Change]: DG for Weak Momentum and Margin Pressure into Q3

NIO Inc. (NIO US) – 4Q22 miss; 5 new models in the next 5 months

China/Asia TMT

Shawn Yang

Equity Bottom-Up

<ul>
<li>We think by adopting the new strategy to unbind vehicle sales with battery swapping, NIO could broaden its customer base to non-Yangtze-Delta regions and regain price competitiveness.</li>
<li>We upgrade to BUY and raise TP to US$ 10.5, due to 1) recovered growth outlook brought by widened customer base, more competitive pricing and intact model cycle</li>
<li>And 2) smaller-than-feared margin pressure. Our TP implies 2x PS. </li>
</ul>


We think by adopting the new strategy to unbind vehicle sales with battery swapping, NIO could broaden its customer base to non-Yangtze-Delta regions and regain price competitiveness.
We upgrade to BUY and raise TP to US$ 10.5, due to 1) recovered growth outlook brought by widened customer base, more competitive pricing and intact model cycle
And 2) smaller-than-feared margin pressure. Our TP implies 2x PS. 


NIO Inc. (NIO US, BUY, TP US$10.5) Rating Change: Witnessing a Turning Point…UG to BUY