NIO: ES8 Gets Certified as a Prelude to Its Norway Entry in September

NIO: Dark Cloud Cover with Close Below the 10-Day EMA on Friday May Add A Short Term Bearish Signal

NIO Inc.  EM Stock Pickers Take Wide Berth

Consumer Discretionary / Industrials

Henry Kwon

Equity Bottom-Up

NIO announced its May delivery numbers (-5.5% MoM, +95.3% YoY), sending its shares up by 9.97% at market close today. The shares have closed above its 200DMA and 61.8% Fibonacci Retracement level of $38.67 for the third day in a row on high volume. The sequential drop in unit sales came from chip shortage per company announcement so investors should look to see whether NIO will deliver on its promise in June.<ul>
<li>NIO noted in its May delivery announcement that May deliveries were "adversely impacted for several days due to the volatility of semiconductor supply and certain logistical adjustments." The company indicated that in June the company should be able to make up for May's lost production.</li>
<li>The company's 2Q21 delivery target remains unchanged at 21-22,000 units. If achieved, this would represent 4.7-9.7% sequential quarterly increase, and 107.2-117.2% YoY increase.</li>
<li>While the Joint Manufacturing Agreement Renewal with JAC targets doubling of current capacity by 2024 the plant's current productivity profile suggests that capacity increase for the ET7 commercial production expected in 1Q22 should be coming largely from productivity gains.</li>
</ul>On the fundamental front, demand growth for EV's and China's average SAAR through April (21.4mn units, +6.5% YoY) should continue to be supportive of NIO's operating environment. While cost pressures may arise from inflationary forces in the coming quarters, I have not noticed anything that should sound alarm bells from NIO's May delivery figures. However, XPEV's May delivery figures increased sequentially without any chip shortage references, so investors should look to industry sales figures expected to be released in the first half of the month for further details on an industry-wide basis .On the short term share price front, if there is a corrective pullback without an event catalyst, the 200DMA of $38.73/$38.67 61.8% Fibonacci retracement should be looked to as first support. If momentum is strong, the stock is likely to try to reach for its 100 DMA of $45.22 this week.

NIO announced its May delivery numbers (-5.5% MoM, +95.3% YoY), sending its shares up by 9.97% at market close today. The shares have closed above its 200DMA and 61.8% Fibonacci Retracement level of $38.67 for the third day in a row on high volume. The sequential drop in unit sales came from chip shortage per company announcement so investors should look to see whether NIO will deliver on its promise in June.
NIO noted in its May delivery announcement that May deliveries were "adversely impacted for several days due to the volatility of semiconductor supply and certain logistical adjustments." The company indicated that in June the company should be able to make up for May's lost production.
The company's 2Q21 delivery target remains unchanged at 21-22,000 units. If achieved, this would represent 4.7-9.7% sequential quarterly increase, and 107.2-117.2% YoY increase.
While the Joint Manufacturing Agreement Renewal with JAC targets doubling of current capacity by 2024 the plant's current productivity profile suggests that capacity increase for the ET7 commercial production expected in 1Q22 should be coming largely from productivity gains.
On the fundamental front, demand growth for EV's and China's average SAAR through April (21.4mn units, +6.5% YoY) should continue to be supportive of NIO's operating environment. While cost pressures may arise from inflationary forces in the coming quarters, I have not noticed anything that should sound alarm bells from NIO's May delivery figures. However, XPEV's May delivery figures increased sequentially without any chip shortage references, so investors should look to industry sales figures expected to be released in the first half of the month for further details on an industry-wide basis .On the short term share price front, if there is a corrective pullback without an event catalyst, the 200DMA of $38.73/$38.67 61.8% Fibonacci retracement should be looked to as first support. If momentum is strong, the stock is likely to try to reach for its 100 DMA of $45.22 this week.

NIO: Observations on the May Delivery Figures