Nio Maintains Full-Year Delivery Target; FVE Cut to USD 25.50 On Rising Expenses

Nio delivered solid second-quarter revenue that exceeded the high end of company’s guidance by 2% and our estimate by 6%. Despite enlarged losses on rising operating expense levels, management is confident of delivering its full-year target of around 150,000 units, which we believe is a positive surprise to the market. We reduce our fair value estimate to USD 25.50 per ADS (HKD 200.00 per share) from USD 27.00 per ADS (HKD 212.00 per share) but maintain our positive view on the company. Our fair value implies a forward 2023 price/sales ratio of 2.8 times.