Nio Inc (Nio US) - Automotive Data Security, Delivery Declines and Hefei Investors

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Forensic Analyst

Jason Yap, CFA

Forensic Accounting

<p>In recent months, <a href="https://www.smartkarma.com/entities/nio-inc" target="_blank" data-smartkarma-citation="entities:27399:1" rel="noopener">NIO Inc (NIO US)</a> announced record vehicle deliveries and ambitious domestic and international expansion plans.  These developments highlight the significant progress it made compared to early 2020 when it appeared to be on the verge of bankruptcy.  This article discusses the Hefei Investors' emergency funding which facilitated Nio Inc's subsequent business and share price turnaround but subjected ADR holders to certain risks including, amongst others, structural subordination in terms of their claim on the key operating assets in China.</p>

In recent months, NIO Inc (NIO US) announced record vehicle deliveries and ambitious domestic and international expansion plans.  These developments highlight the significant progress it made compared to early 2020 when it appeared to be on the verge of bankruptcy.  This article discusses the Hefei Investors' emergency funding which facilitated Nio Inc's subsequent business and share price turnaround but subjected ADR holders to certain risks including, amongst others, structural subordination in terms of their claim on the key operating assets in China.

Nio Inc – Structural Subordination to Hefei Investors and Associated Risks