Nio Investors Pull Back After Automaker Posts Wider Q4 Loss, Details Coronavirus Impact

Chinese electric vehicle manufacturer Nio Inc – ADR NIO reported fourth-quarter results Wednesday, posting revenue that was slightly ahead of expectations, a wider-than-expected net loss and a first-quarter outlook that trailed expectations. 

Nio's Q4, Full Year Results 

The Shanghai-based company reported fourth-quarter revenue of 2.85 billion yuan ($409.1 million), representing a 55.1% quarter-over-quarter.

On a year-over-year basis, revenues were down 17.1%, as the company sold more of the lower-margin E6 models in the fourth quarter of 2019.

The adjusted loss, excluding share-based compensation expenses, was 2.81 billion yuan ($404.1 million), higher than a 2.45-billion-yuan loss in the third quarter and lower than Nio's 3.31-billion-yuan-loss a year ago.

On a per ADS basis, the non-GAAP loss was 2.73 yuan or 39 cents per share. 

Analysts, on average, estimated a loss of 1.84 yuan per ADS on revenue of 2.84 billion yuan.

As of Dec. 31, Nio's cash and cash equivalents, restricted cash and short-term investments totaled $151.7 million, a drawdown from $274.3 million at the end of the third quarter.

See also: Nio's History Of Capital Raises: A Look At The Chinese EV Manufacturer's Debt

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COVID-19 Weighing On Deliveries

Nio delivered 8,224 vehicles in the fourth quarter, up from 4,799 in the third quarter and 7,980 vehicles in the fourth quarter of 2018.

Cumulative deliveries for 2019 totaled 20,565, up 81.2% year-over-year. 

Vehicle deliveries, which improved in the second half of 2019, took a tumble in January due to reduced business days account of the Chinese New Year holidays and the coronavirus outbreak in late January.

January deliveries fell 11.5% year-over-year to 1,598 vehicles and the weakness continued into February, with deliveries coming in at an anemic 707.

Nio's Outlook

While stating that it has started 2020 on a challenging note due to the COVID-19 outbreak, Nio said it striving to resume production, expand traffic channels, integrate online and offline sales efforts and offer the best services possible. 

"We have covered 59 cities with 22 NIO Houses and 62 NIO Spaces in China, which efficiently support our branding and sales efforts. We are well prepared to proceed through the headwind and become stronger in 2020," CEO William Li said in a statement. 

Nio said it expects its efforts to optimize the organizations and improve operation efficiency to significantly reduce its opex and improve cash flows in 2020 and beyond.

"Additionally, we made several private placements of convertible notes in February and March 2020, in an aggregate principal amount of US$435 million, which supported our daily operations and business development," CFO Wei Feng said in a statement. 

The company said it expects first-quarter deliveries to decline year-over-year and sequentially to 3,400-3,600 vehicles due to the coronavirus.

For the quarter, the company expects revenues of 1.21 billion yuan ($173.7 million). Analysts expect revenues of 2.48 billion yuan for the quarter on average. 

Nio shares were down 18.1% at $2.38 at the time of publication Wednesday. 

Related Link: Tesla Now China's Largest EV Manufacturer By Output: Report

Photo courtesy of Nio.