研究报告全文：30Aug2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateNIOIncNIOUSHOLDMaintainLittlesignofprofitturnaroundafter2Q23missTargetPriceUS1000PreviousTPUS920UpDownside-51MaintainHOLDNIOs2Q23earningsmissedourpriorforecastonlowerGPMCurrentPriceUS1054higherRDandSGAexpensesIts3Q23salesguidancemayimplythattheChinaAutoSectorsalesboostfromthepreviouspricecutscouldbeshort-livedoratleastlowerthansomeinvestorsexpectationMoreimportantlywehavenotseenitsprofitabilityturnaroundsignalsaslossesfromotherrevenuecontinuewiththeSHIJiCFApriorpricecutandnosignstoscalebackitsRDandSGAexpenses85237618728shijicmbicomhkNosignsofcostreductionfrom2Q23earningsmissNIOsnetlossofDOUWenjingCFARMB61bnin2Q23wasaboutRMB11bnwiderthanourpriorexpectation85269394751asitsGPMSGAandRDexpensesallmissedourforecastsItappearstodouwenjingcmbicomhkusthatNIOhasnotscaledbacksomenon-coreprojectsdespiteheavylossesThatmakesusworrythatitslossescouldcontinueforalongperiodoftimeGUSijiejasongucmbicomhk2H23outlookamid3Q23salesguidancemissNIOs3Q23salesvolumeguidanceof55000-57000unitswasbelowthecompanyandinvestorspriorexpectationofatleast60000unitsWemaintainourFY23EsalesforecastofStockData018mnunitsor21000unitspermonthonaveragein2H23EWeareoftheMktCapUSmn18963viewthatmanagementsGPMguidanceofdoubledigitsfor3Q23and15forAvg3mthstoUSmn7244Q23couldbefeasibleforvehiclemarginbutnottheoverallGPMaslosses52wHighLowUS2274700fromotherrevenuedragdowngrossprofitsignificantlyWeprojectGPMofTotalIssuedSharesmn1680SourceBloomberg97in2H23EwhichisstillfarawayfromoffsettingNIOsheavyRDandSGAexpensesWeprojectanarrowednetlossofRMB73bnin2H23EShareholdingStructureLiBin104ProfitabilityturnaroundsignalnotseenyetAswenotedinourpreviousTencententities98reportthatNIOspricecutsinJun2023couldweighonmarginsinthenextOthers798fewyearsduetodecreasedrealizationofdeferredrevenueItsmass-marketSourceBloombergbrandAlpswouldlikelygeneratelowerGPMthantheNIObrandThereforeSharePerformanceheavynetlossatNIOislikelytocontinueinFY24EdespiteoursalesAbsoluteRelativeassumptionof025mnunitsnextyearshouldNIOnotcutRDandSGA1-mth-280-177expensessignificantly3-mth4624476-mth152275ValuationRisksWemaintainourHOLDratingandraisetargetpriceslightlySourceBloombergfromUS920toUS1000basedon15xpreviously17xFY23EourrevisedFY24ErevenueestimatestoreflectatoughersituationthatNIOfaces12-mthPricePerformanceUSnowLiAutoLIUSBUYwithmuchbetterprofitabilityandcashposition25NIOUSMSCIChinarebasednowalsotradesat15xourFY24EPSKeyriskstoourratingandtargetprice20includehigherorlowersalesvolumeandmarginsthanweexpectaswellasasectorre-ratingorde-rating15EarningsSummary10YE31DecFY21AFY22AFY23EFY24EFY25E5RevenueRMBmn36136492696182186939883850YoYgrowth1223363255406172022-082022-112023-022023-05NetincomeRMBmn1057214559181991337512208SourceBloombergEPSRMB6728891065759689YoYgrowthNANANANANAAuditorPricewaterhouseCoopersPSx2823201515ZhongTianPBx294894575164YieldNANANANANARelatedReportsNIOIncMargindentfrompricecutsROE3424979761708NAlingersintoFY24-254Jul2023NetgearingNetcashNetcashNetcashNetcashNASourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk30Aug2023Figure1QuarterlyresultsRMBmn1Q222Q223Q224Q221Q232Q23YoYQoQSalesvolumeunits257682505931607400523104123520-61-242ASPRMB384608410725411368401066343947372948-9284Revenue9911102921300216064106768772-148-178Grossprofit14471340173562216287-935-464RDexpenses17622149294539813076334555687SGAexpenses201522822712352724462857252168Operatingprofit218928463870673651126074NANANetprofit182527454142584748046122NANAGrossmargin146130133391510-120ppt-05pptOperatingmargin-221-276-298-419-479-692-416ppt-214pptNetmargin-184-267-319-364-450-698-431ppt-248pptSourceCompanydataCMBIGMestimatesFigure2EarningsrevisionNewOldDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue618218693988385620096969280045-03247104Grossprofit443882038010313549586243416655283Operatingprofit189491425113031176021523213292NANANANetprofit181991337512208166641438412586NANANAGrossmargin72949151717821ppt23ppt13pptOperatingmargin-307-164-147-284-219-166-23ppt55ppt19pptNetmargin-294-154-138-269-206-157-26ppt53ppt19pptSourceCMBIGMestimatesFigure3CMBIestimatesvsconsensusCMBIGMConsensusDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue6182186939883856288596591128387-17-100-312Grossprofit44388203801058021482123441-235-447-658Operatingprofit1894914251130311639588622276NANANANetprofit181991337512208149077231933NANANAGrossmargin72949192153183-20ppt-59ppt-92pptOperatingmargin-307-164-147-261-92-18-46ppt-72ppt-130pptNetmargin-294-154-138-237-75-07-57ppt-79ppt-131pptSourceBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE230Aug2023FinancialSummaryIncomestatementCashflowYE31DecRMBmnFY21AFY22AFY23EFY24EFY25EYE31DecRMBmnFY21AFY22AFY23EFY24EFY25ERevenue3613649269618218693988385Profitbeforetaxation397514382178901308611922Costofsales2931544125573837873680375Depreciationamortization23523994622278628924Grossprofit68215144443882038010Changeinworkingcapital26934444961675314238Others8962078181416461443RDexp459210836129161190310995Netcashfromoperating1966386623839545794SGAexp687810537112711155111146Otherincome15258980010001100Capex40796973800170016001Operatingprofit449615641189491425113031Others3568617358510338002900Netcashfrominvesting3976510385289832013101Netfinancecosts2741026799686509GainLossofinvestee633786080100Shareissuance12822795918600600Othernon-operexp185145200400500Netborrowings36801632527720001892Pre-taxprofit397514382178901308611922Others162763101010Netcashfromfinancing18129161665026102502Incometax4255543936Accronredeemableint6587279300300300Netchangeincash196704903248633636392Minorityinterests31157455050Cashatyearbeginning3854518375231552067024032Netprofit1057214559181991337512208Exchangedifference501122---Cashatyearend1837523155206702403217640BalancesheetKeyratiosYE31DecRMBmnFY21AFY22AFY23EFY24EFY25EYE31DecFY21AFY22AFY23EFY24EFY25ECurrentassets6364159150499575306044512SalesmixCashequivalents15334198881752021382149904Vehiclesales918924890883846Accountreceivables2781511850817146726563Others8276110117154Inventories2056819155035609572581Othercurrentassets434702595321854189241653321GrowthRevenue122336325540617045Non-currentassets1924237114384124038537032Grossprofit264124613784823720PPE7400156591912820131191058OperatingprofitNANANANANA698Right-of-useassets29887374787873125661NetprofitNANANANANA24Othernon-currentassets885414081114061294212267041Totalassets8288496264883699344581545392ProfitlossratioGrossmargin189104729491593Currentliabilities2919845852466155856957625Operatingmargin1243173071641476504Bankborrowings72985277--1892Netprofitmargin293296294154138081Accountpayables12639252242987138829374359631628286286286286BalancesheetratioTaxpayable46Othercurrentliabilities86331506516457194541801291Netcashtotalequityx10091436NA2Currentratiox22131109087385Non-currentliabilities1562222765243242836127351Receivableturnoverdays2838303030612BankborrowingsinclCB973910886108861288612886Inventoryturnoverdays266835262684Othernon-currentliabilities58831187913438154751446695Payableturnoverdays157209190180170Totalliabilities4482068617709398692984977268092ProfitabilityMezzanineequity32783557385741574457ROE3424979761708NA382Sharecapital33333ROA154163197147140864Treasuryshares18501850185018501850573Reserves3655725715152534099608986-PersharedataRMBNon-controllinginterests76221166106462EPS672889106575968909Shareholdersequity34710238681340722527936DPSNANANANANA172Totalequityliabilities82884962648836993445815452175SourceCompanydataCMBIGMestimates46616942PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE330Aug2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBIGMwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE4