Stock under pressure: Nio Inc – ADR (NYSE: NIO)

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Nio Inc – ADR (NYSE: NIO) stock fell over 2.1% on 19th March, 2020 (Source: Google finance) after the company in the fourth quarter of FY 19 has reported adjusted net loss (non-GAAP) of RMB 2,813.4 million (US$404.1 million) in the fourth quarter of 2019, which represents an increase of 14.8% from the third quarter of 2019 and a decline of 16.3% from the same quarter of 2018. The company has delivered, on a combined basis, 8,224 ES8 and ES6 vehicles in the fourth quarter of 2019, which represents a 71.4% sequential increase from the prior quarter. Moreover, Vehicle sales in the fourth quarter of 2019 has risen 54.8% to RMB2,683.9 million (US$385.5 million from the third quarter of 2019 and a decline of 20.6% from the same quarter of 2018. The rise in vehicle sales over the third quarter of 2019 was due to higher deliveries achieved from the existing users’ referrals and the expansion of the sales network through the continued launch of more efficient NIO Spaces in the fourth quarter of 2019. The decrease in vehicle sales over the fourth quarter of 2018 was due to a higher proportion of ES6 sold in the fourth quarter of 2019.

Additionally, the company has made several private placements of convertible notes in February and March 2020, of total principal amount of US$435 million, which supported the company’s daily operations and business development. On February 25, 2020, the company had signed a collaboration framework agreement with the municipal government of Hefei, Anhui Province, who expects to provide resources and funding support for NIO to establish NIO China headquarters in Hefei for the company’s long-term growth.

Based on the COVID-19 outbreak in China since the end of January 2020, the China auto industry in general and the production and delivery of vehicles of the Company will get affected for the first quarter of 2020. Therefore, the Company expects Deliveries of the vehicles to be between 3,400 and 3,600 vehicles, which represents a decrease of approximately 56.2% to 58.7% from the fourth quarter of 2019, and a decrease of approximately 9.8% to 14.8% from the first quarter of 2019.

Total revenues is expected to be between RMB1,209.0 million (US$173.7 million) and RMB1,273.2 million (US$182.9 million), which represents a decrease of approximately 55.3% to 57.6% from the fourth quarter of 2019, and a decrease of approximately 21.9% to 25.9% from the first quarter of 2019.

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