Nio Reports Q4 Beat, Hints At Reacceleration In Growth In 2022

Nio, Inc. NIO announced Thursday fourth-quarter results that exceeded expectations, helped by volume growth and an expansion in vehicle margin. The company's first-quarter guidance suggested sequentially flat to slightly higher deliveries and below-consensus revenues.

Nio confirmed its plans for the launch of three new models and additional international expansion in 2022.

Nio's Key Q4 Metrics: Shanghai-based Nio reported a fourth-quarter loss of 16 cents per share on a non-GAAP basis, wider than the year-ago loss of 14 cents per share and the previous quarter's loss of 6 cents per share.

Fourth-quarter revenue came in at $1.554 billion, up 52.4% from the year-ago's $1.02 billion and 2.24% higher than the third-quarter's $1.52 billion.

Analysts, on average, estimated a loss of 21 cents per share on revenues of $1.53 billion, according to Benzinga Pro.

Vehicle sales accounted for 93.08% of the total revenue, while other sales contributed $107.55 million to total revenues, down from $181.35 million in the third quarter. Regulatory credit and battery upgrade services are among the items that go in to other sales.

Vehicle margin for the quarter came in at 20.9%. This compares to the 17.2% reported for the year-ago quarter and 18% for the previous quarter. Nio noted that the average selling price remained stable and production efficiency improved.

Gross margin remained flat year-over-year at 17.2% but contracted 310 basis points from the third quarter's 20.3%.

Nio ended the year with cash and cash equivalents, restricted cash and short-term investment of $8.7 billion.

"2021 had been a year of making decisive investments in products and technologies, as well as in power and service infrastructures. It had also been a year of elevated operations in fast iteration, supply chain response and innovation, production capacity expansion and systematic quality management to make comprehensive preparations for our development in the next phase," chairman and CEO William Li said in a statement.

Related Link: Nio's First ET7 Sedans Roll Off The Production Line Ahead Of Q4 Earnings

Q4 Deliveries Fluctuate: Nio's deliveries came in at an anemic 3,667 units in October, with the company blaming the softness on manufacturing line upgrades in preparation for new product introduction. The company returned to trend-like growth in November, selling 10,878 vehicles during the month. Deliveries pulled back a bit in December to 10,489 vehicles, taking the cumulative tally for the fourth quarter to 25,034 vehicles.

The softness continued into 2022. Nio sold 9,652 and 6,131 vehicles, respectively in January and February. February is typically a slow month for auto sales in China, as it invariably encompasses the weeklong Chinese New Year holiday.

Key Quarterly Developments: Removing an overhang, Nio finally managed to win approval and proceeded with listing its shares on the Hong Kong stock exchange.

The company held its Nio Day 2021 in January, wherein it announced a new midsized sedan, named ET5. After firmly establishing itself in Norway, the company also disclosed plans to expand into a few other European countries, including Denmark, Germany, Sweden and the Netherlands.

Nio is on track to begin deliveries of its ET7 sedan by the end of March and the ET5 sedan by September. The ET5 has a starting price of 328,000 yuan ($51,510) before subsidies.

Even as most others raised vehicle prices, citing higher input prices, Nio has thus far held off on that.

Nio's Q1 Guidance: Looking forward, the company expects first-quarter revenues of $1.511 billion to $1.567 billion, representing 20.6%-25.1% year-over-year growth. The consensus estimate calls for revenues of $1.66 billion.

Deliveries are expected to come in at 25,000-26,000 units. In order to beat the guidance, Nio has to sell 9,217-10,217 vehicles in March.

Nio's Li said he expects 2022 to be a "year of reacceleration," with the planned deliveries of three new products based on the company's NT Platform 2.0.

Related Link: COVID-19 Resurgence In China To Hurt Tesla, Chinese Automakers: Which EV Stock Is Likely To Suffer The Most?

Nio Stock: Nio was among the worst-performing stocks in 2021. The selling in the stock intensified in 2022, precipitated by concerns over potential delisting in the U.S., the Ukraine-Russia war that sent raw material prices spiraling and the lockdowns put in place following the resurgence of COVID in some parts of China.

It hit a trough of $13.01 on March 15 and has since then been on the mend.

Nio stock, which closed Thursday's session up 0.50% at $21.98, was up about 0.5% to $22.06 in after-hours trading.