External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>NIO’s 4Q22 earnings missed our prior forecast on inventory provision, R&amp;D and SG&amp;A.</li><li>We are of the view that NIO’s 1Q23E sales and margin weakness should be largely priced in.</li><li>Sales in 2H23E could be crucial as supply chain constraints should no longer be an excuse for sales miss. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

NIO’s 4Q22 earnings missed our prior forecast on inventory provision, R&amp;D and SG&amp;A.We are of the view that NIO’s 1Q23E sales and margin weakness should be largely priced in.Sales in 2H23E could be crucial as supply chain constraints should no longer be an excuse for sales miss. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

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

Thematic (Sector/Industry)

<ul><li>China’s passenger-vehicle (PV) retail sales volume fell 43% YoY in Jan 2023, in line with our prior forecast of 44% YoY decline.</li><li>Wholesale volume fell 33% YoY last month, 30% stronger than our prior projection, largely due to much weaker than-expected inventory destocking and higher export volume.</li><li>PV exports only fell 9% MoM to about 250,000 units in Jan 2023. Automakers only cut about 26,000 units of inventories in their dealers’ showrooms in Jan 2023 based on our calculations, despite early Chinese New Year, which has led to more than two months of inventories based on our projected retail sales volume for Feb and Mar 2023. I</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China’s passenger-vehicle (PV) retail sales volume fell 43% YoY in Jan 2023, in line with our prior forecast of 44% YoY decline.Wholesale volume fell 33% YoY last month, 30% stronger than our prior projection, largely due to much weaker than-expected inventory destocking and higher export volume.PV exports only fell 9% MoM to about 250,000 units in Jan 2023. Automakers only cut about 26,000 units of inventories in their dealers’ showrooms in Jan 2023 based on our calculations, despite early Chinese New Year, which has led to more than two months of inventories based on our projected retail sales volume for Feb and Mar 2023. IContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Auto Sector – Inventory risk could lead to a bumpy recovery

<ul><li>Nine new-energy vehicle (NEV) brands including BYD, NIO, Xpeng, Li Auto, Zeekr, Aion, Aito, Neta and Leap reported their Jan 2023 sales volumes on 1 Feb 2023.</li><li>Sales volume of the nine brands combined rose 22% YoY (ranged from -86% to +449%) and dropped 42% MoM (ranged from -87% to -23%)</li><li>Li Auto beat, NIO and Xpeng miss. Li Auto delivered over 15,000 units in Jan 2023, exceeding some investors’ expectation.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Nine new-energy vehicle (NEV) brands including BYD, NIO, Xpeng, Li Auto, Zeekr, Aion, Aito, Neta and Leap reported their Jan 2023 sales volumes on 1 Feb 2023.Sales volume of the nine brands combined rose 22% YoY (ranged from -86% to +449%) and dropped 42% MoM (ranged from -87% to -23%)Li Auto beat, NIO and Xpeng miss. Li Auto delivered over 15,000 units in Jan 2023, exceeding some investors’ expectation.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Auto Sector – Jan NEV likely in line or slightly miss; Li Auto beat

<ul><li>We project NIO’s 4Q22E net loss to narrow QoQ, despite sales volume miss.</li><li>We project NIO’s sales volume to rise 63% YoY to 200,000 units in FY23E.</li><li>We are more conservative about NIO’s breakeven point than consensus, as we believe it may need mass-market brand to achieve it given its heavy investments in R&amp;D and infrastructure.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We project NIO’s 4Q22E net loss to narrow QoQ, despite sales volume miss.We project NIO’s sales volume to rise 63% YoY to 200,000 units in FY23E.We are more conservative about NIO’s breakeven point than consensus, as we believe it may need mass-market brand to achieve it given its heavy investments in R&amp;D and infrastructure.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

NIO Inc. (NIO US) – 4Q22E loss to narrow; FY23 sales to outperform

<ul><li>In our last report dated 17 October, we highlighted a list of 21 long ideas.</li><li>The basket (equal weighted) of these 21 stocks underperformed MSCI China index by 5.4ppt, delivering 0.2% return (vs MSCI China 5.6%).</li><li>China Meidong Auto and Innovent Biologics delivered over 20% of return, and 4 of our 21 long ideas outperformed the benchmark.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

In our last report dated 17 October, we highlighted a list of 21 long ideas.The basket (equal weighted) of these 21 stocks underperformed MSCI China index by 5.4ppt, delivering 0.2% return (vs MSCI China 5.6%).China Meidong Auto and Innovent Biologics delivered over 20% of return, and 4 of our 21 long ideas outperformed the benchmark.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

CMBI Research Focus List (November Edition) – Our best high conviction stock ideas

China

NIO Inc. manufactures and sells automobiles. The Company offers electric vehicles and parts, as well as provides battery charging services. NIO serves customers worldwide.

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NIO (NIO US)

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

NIO’s 4Q22 earnings missed our prior forecast on inventory provision, R&D and SG&A. We are of the view that NIO’s 1Q23E sales and margin weakness...

CMB International

China Auto Sector – Inventory risk could lead to a bumpy recovery

Wholesale volume fell 33% YoY last month, 30% stronger than our prior projection, largely due to much weaker than-expected inventory destocking and...

CMB International

China Auto Sector – Jan NEV likely in line or slightly miss; Li Auto beat

Nine new-energy vehicle (NEV) brands including BYD, NIO, Xpeng, Li Auto, Zeekr, Aion, Aito, Neta and Leap reported their Jan 2023 sales volumes on...

CMB International

NIO Inc. (NIO US) – 4Q22E loss to narrow; FY23 sales to outperform

We project NIO’s 4Q22E net loss to narrow QoQ, despite sales volume miss. We project NIO’s sales volume to rise 63% YoY to 200,000 units in FY23E.

CMB International

CMBI Research Focus List (November Edition) – Our best high conviction stock ideas

In our last report dated 17 October, we highlighted a list of 21 long ideas.The basket (equal weighted) of these 21 stocks underperformed MSCI...

CMB International

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