Written by Cláudio Afonso | LinkedIn | X
In a reaction to the departure of Nio‘s chief financial officer announced earlier today, Morgan Stanley analyst Tim Hsiao said C-level changes are “rarely positive news”.
However, Hsiao reiterated the firm’s confidence on the electric vehicle (EV) maker highlighting the continued steady demand at about 5 thousand weekly units.
The company announced earlier today that its Chief Financial Officer Steven Wei Feng has resigned after five years in the company due to “personal and family reasons”. To replace him, the board has promoted its Senior Vice President of Finance, Stanley Yu Qu.
“C-level change is rarely positive news, but Nio’s sound operation as of late should help to ease market concern and thus prevent any panic knee-jerk reaction,” Hsiao noted.
The analyst said he expects limited impact on the company’s current operation as the demand continues to increase.
“We don’t expect this change to disrupt Nio’s current operation or future fund-raising plans, if any. Our recent channel checks suggest Nio’s orders have been steady at a ~5k weekly run rate,” Hsiao explained.
“With improving mix/scale and reduction in promotions for certain models, we expect 2Q GPM to meet the company’s guidance of double digits, or our expectation of low teens,” he added.
As Nio prepares to start delivering the first model of its sub-brand Onvo on September 10, Morgan Stanley sees the event as “more crucial” for the stock performance.
“Onvo L60 remains a more crucial stock catalyst, for which we expect more feedback on product, orders, and price in August leading up to the official delivery on September 10. The company has been accepting pre-sale orders at Rmb219.9k,” he concluded.
Year to date, Nio shares have lost 46 percent of their value. The stock reached its all-time high in January 2021, peaking at nearly $67 per share shortly after the company introduced the Nio ET7, the first model from its second-generation platform (NT2).
On Wednesday, Nio shares closed at $4.87 per share. Following the news, the stock is trading 2.46 percent lower during the pre-market trading session.
Earlier this week, the company reported the delivery of 21,209 vehicles in June, surpassing its estimates of between 17,800 and 19,8000 vehicles.
The result represents a year-over-year growth of 98.10 percent and brings the quarterly deliveries to 57,373 units, a growth of 143.90 percent. As of the time of writing, Nio US-listed stock is trading 4.33 percent higher at $4.33 per share following the news.
Written by Cláudio Afonso | LinkedIn | X
