What’s causing Nio Inc – ADR (NYSE: NIO) stock fall

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Nio Inc – ADR (NYSE: NIO) stock fell 11.96% on January 7th, 2020 and continued its fall in the pre-market session of January 8th, 2020 (Source: Google finance). The company’s third-quarter loss narrowed more than expected as revenue and vehicle deliveries increased, and provided a strong outlook for the current quarter. The company has reported a net loss for the quarter to Sept. 30 of 2.52 billion renminbi ($352.8 million) from a loss of RMB9.76 billion, in the same period a year ago.

The company has reported a 25.4% month-over-month increase in December vehicles deliveries due to strong sales of both the ES6, which is the Company’s 5-seater high-performance premium electric SUV, and the ES8, which is the Company’s 7-seater high-performance premium electric SUV and its 6-seater variant. Trading volume reached 3.7 million shares ahead, enough to make the stock the most actively traded ahead of the open. The 3,170 vehicles delivered last month included 22.7% growth in ES6 vehicles to 2,537 and a 37.3% increase in ES8s to 633. At the end of December, 2019, the total deliveries of the ES6 and the ES8 reached 31,913 vehicles, out of which 20,565 were delivered in 2019. The sales increased on the back of the expansion of the sales network through the continued launch of more efficient NIO Spaces. As the product offerings further enhanced and upgraded in 2020 though the all-new ES8, the 100-kWh battery pack and the upcoming EC6, a 5-seater smart premium electric coupe SUV, the company continue to expect strong order momentum to continue going forward.

NIO in the third quarter of FY 20 has reported the adjusted loss of RMB2.38 a share, beating the analysts’ estimates for the adjusted loss of RMB2.53 a share, according to the FactSet consensus. The company had reported the adjusted revenue growth of 25 percent to RMB1.84 billion ($257.0 million) in the third quarter of FY 20, beating the analysts’ estimates for revenue of RMB1.70 billion.

For the fourth quarter, Nio expects revenue to be of RMB2.81 billion, well above the FactSet consensus of RMB2.07 billion, while deliveries are expected to spike up to increase to over 8,000 vehicles. Due to a continuous soft auto market, the company strongly believes the smart premium EV sector will outperform the industry in its growth rate in the foreseeable future.

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