【行业研究报告】蔚来-Cash burn speeds up with capital injection

6Mar2024
CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdate
NIOInc.(NIOUS)
Cashburnspeedsupwithcapitalinjection
MaintainHOLD.NIO’sall-timehighR&DandSG&Aexpensesin4Q23once
againconfirmthatitisprobablytoodifficultforthecompanytocontrolcosts.
ThecashburnfromCYVN’scapitalinjectionmaylastshorterthanweexpected
before.Weseenosignorpersuasivestrategiestoturnprofitablefromthe
earningscall.Webelievemanagement’sguidanceforFY24EGPMcouldbetoo
optimistic.
4Q23earningsmissonotherincomeandSG&A:NIO’srevenueand
grossprofitfromvehiclesin4Q23werebothinlinewithourpriorforecast,
grossprofitfromvehiclesin4Q23werebothinlinewithourpriorforecast,
butitsvehicleGPMof11.9%in4Q23misseditsguidanceof15%.Gross
marginof-34%forotherrevenuewasalsobelowourprojectionof-25%.
Thatunderscoredourpriorargumenton4Jul2023thattheeliminationof
servicebenefitscouldweighonmarginsmorethanexpectedbysome
investorsinthenextfewyears,anditseemstocomeearlierthanour
expectation.BothR&DandSG&Aexpensesin4Q23wereabout
RMB720mnhigherthanourestimates.Thatresultedinanoperatinglossof
RMB6.6bnin4Q23,aboutRMB1.9bnhigherthanourprojection.
Nosignorpersuasivestrategiestoturnprofitable.WecutourFY24
salesvolumeforecastfrom0.21mnunitsto0.19mnunits,largelydueto
later-than-expecteddeliveries(in4Q24)ofthesecondbrandAlps.
ManagementmaintainsitsvehicleGPMguidanceof15-18%forFY24E,
which,inourview,istoooptimistic,especiallyasitbelievesthefacelifted
modelsfrom2Q24couldliftmarginsthroughouttheyear.ThevehicleGPM
didnothit15%ineither3Q23or4Q23whenkeymodelswerejustupgraded
intotheNT2.0.Thediscountshavestartedtoincreasetwoquartersafter
theupgradedespiteNIO’seffortstomaintainitspricing.
Evenifweassumea15%vehicleGPMandverydisciplinedinvestmentsin
R&DandSG&A,itsFY24EnetlosswouldstillbehigherthanRMB10bn,far
awayfromturningprofitable.WedonotthinktheAlpsanditsthirdbrand
FireflyfromFY25areabletoturnthecompanyprofitable.
Earnings/Valuation.WereviseourFY24EnetlossfromRMB14.7bnto
RMB17.2bn,asnotedabove.WemaintainourHOLDratingandcuttarget
pricefromUS$6.80toUS$6.20,basedon1.4x(unchanged)ourrevised
FY24Erevenueestimates.LiAuto(LIUS,BUY),withmuchbetter
profitability,nowtradesat1.3xourFY24EP/S.Keyriskstoourratingand
targetpriceincludehigherorlowersalesvolumeandmarginsthanwe
expect,aswellasasectorre-ratingorde-rating.