What To Expect From Nio's Q2 Report Due Wednesday

Nio. Inc-ADR NIO kickstarts the Chinese EV reporting season with the release of its second-quarter results Wednesday after market close.

Key Nio Q2 Metrics to Watch Out For: Analysts, on average, expect Nio to report a loss of 11 cents per share, narrower than the year-ago loss of 18 cents per share.

Revenues are estimated at $1.28 billion, up 133.30% from last year's $550.47 million.

The company, meanwhile, guides to revenues of $1.243 billion to $1.298 billion.

In the first quarter, the manufacturer of premium EVs reported a narrower loss of 4 cents per share on revenues of $1.22 billion. The company had beaten Street expectations and its own guidance during the quarter.

Investors may also keep an eye on the vehicle margin, which has been on an upward trajectory. The first-quarter vehicle margin was at 21.2%, up from 17.2% in the fourth quarter of 2020.

Nio ended the first quarter with a cash balance of $7.3 billion.

Related Link: Tesla's July Deliveries Tumble 69% Month-Over-Month In China, Underperforming Nio, XPeng, Li Auto

Nio's Deliveries Momentum Slows: Nio delivered 21,896 vehicles in the second quarter. This represented an increase from the 20,060 vehicles it delivered in the first quarter.

Despite the quarter-over-quarter increase, the pace of growth has slowed. In April and May, Nio's deliveries were down month-over-month, but in June the company registered both month-over-month and year-over-year increases.

The month-over-month decline resumed in July with global semiconductor shortage blamed for the predicament.

Nio delivered 7,931 vehicles in July, down about 2% month-over-month. Nevertheless, it represents a 125% year-over-year increase.

Nio On Track With European Expansion Plan: Nio, which officially announced its entrance into Norway in early May, has made progress in its expansion into the European nation.

The first batch of Nio home charging piles and superchargers were shipped to Norway in early July, with the goal of delivering them to Norwegian users in September. The company plans to start selling its ES8 model in the country.

Rumors suggest the company is contemplating setting up its European headquarters in Amsterdam. It is also scouting for opportunities to set up shop in other European nations such as Germany and the U.K., reports say.

Product Pipeline Broadens: Nio is all set to commercially launch its first-ever sedan, codenamed ET7, in the first quarter of 2022. The second model to be sold in Norway will be the ET7, the company has said.

Speculation concerning a mass-market model under a different brand name is also swirling on the Street.

Key Talking Points On Earnings Call: Nio is likely to be asked questions regarding the progress of European expansion. Sell-side analysts and investors alike will also be interested in the margin trajectory.

Given that Nio's peer Xpeng Inc-ADR XPEV is already listed on the Hong Kong stock exchange and Li Auto Inc LI is scheduled to begin trading there this week, questions on the timeline for a secondary listing in Hong Kong will likely crop up. It is speculated that Nio's listing in Hong Kong is delayed due to user trust issues.

Nio may also be asked about the semiconductor shortage and its impact on deliveries in the near term and the agenda for Nio Day 2021.

Nio Shares Locked In a Range: After scaling an all-time peak of $66.99 on Jan. 11, the stock was rangebound until mid-February. Then the stock retreated and hit a low of $30.71 in mid-May.

Nio bounced back from the low and began tracing an uptrend and in the process hit a near-term peak of $55.13 on July 1, only to pull back subsequently. The stock is currently locked in the $40 to $46 trading range.

Looking at the stock reaction to previous earnings releases, Nio added 2.2% in the session that followed the release of first-quarter earnings. The wider loss reported for the fourth quarter of 2020 sent its shares down by about 13%.

At last check Tuesday, Nio shares were slipping 2.19% to $44.22.

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Photo: Nio ET7 courtesy Nio