NIO's Stock Soars After EV Maker Turns Profitable

By Jiahui Huang

NIO shares accelerated in Hong Kong after the Chinese electric-vehicle maker reported its first-ever quarterly profit and gave strong guidance.

The company's stock was recently 16% higher after rising 20% to a peak of 45.66 Hong Kong dollars early Wednesday. That put shares on track for their best daily percentage gain in one-and-a-half years. NIO's American depositary receipts closed 15% higher overnight.

The automaker reported an earnings beat late Tuesday, turning a profit for the first time as sales rose to a record in the fourth quarter. Net profit was 122.4 million yuan for the three months ended December, equivalent to $17.8 million, compared with net loss of 7.13 billion yuan a year earlier.

The EV maker also provided a robust outlook, expecting deliveries to nearly double to between 80,000 units and 83,000 units in the first quarter, with revenue expected to more than double to 24.48 billion yuan to 25.18 billion yuan.

Citi wrote in a note that the revenue guidance implies March sales of 35,000 vehicles, ahead of its sector forecast.

NIO could continue to benefit from a favorable product mix in the first quarter thanks to its flagship ES8 SUV, Bernstein analysts said. However, they flagged margin visibility risks for the rest of the year amid rising costs for lithium battery and memory chips.

NIO's chief executive expressed confidence during the earnings call that the company would achieve 40% to 50% volume growth this year. The target drew caution from Macquarie, which noted ample new competition in the SUV market this year from rivals such as Li Auto, XPeng, Xiaomi and Seres, according to a note.

Write to Jiahui Huang at [e-mail]

(END) Dow Jones Newswires

03-10-26 2348ET