NIO Q4 FY2021 Earnings Report Preview: What to Look For

Focus on NIO car deliveries

Key Takeaways

  • Analysts estimate adjusted EPS of -0.57 yuan (-$0.09) vs. -1.05 yuan in Q4 FY 2020.
  • NIO's car deliveries, already announced, rose at a robust pace YOY.
  • Revenue is expected to rise at a healthy pace, although growth continues to slow.

NIO Inc. (NIO) continues to experience rapid growth in electric vehicle (EV) sales, which is helping the company to narrow its losses despite ongoing supply chain challenges. However, growth has been slowing over recent quarters. This deceleration in car sales is being experienced across China's auto industry amid a broader slowdown in the Chinese economy.

Investors will be watching to see how these broader economic forces are impacting NIO's financial performance when the company reports its Q4 FY2021 earnings on March 24, 2022. Analysts expect the EV maker's losses per share to narrow sharply compared to the year-ago quarter. Revenue is expected to grow at a healthy pace, albeit much slower than in recent quarters. Note that NIO shares referred to throughout this story represent NYSE-listed American depositary shares (ADS) with the ticker NIO.

Investors are also interested in the number of automobiles NIO sells or delivers. The electric carmaker reported its fourth-quarter vehicle deliveries at the start of January. Total vehicle deliveries surpassed analysts' expectations, but growth decelerated sharply from recent quarters.

Shares of NIO have dramatically underperformed the broader market over the past year. The stock's movement has been volatile throughout the last year and briefly outperformed the market between late June 2021 and early July 2021. However, its performance has lagged ever since and its underperformance with the rest of the market has grown significantly since late November. NIO's shares have provided a total return of -49.3%, well below the S&P 500's total return of 14.5%.

On March 9, 2022, NIO announced that it successfully listed its class A ordinary shares on the main board of the Stock Exchange of Hong Kong Ltd. (SEHK) under the stock code "9866". These shares are fully fungible with the company's ADSs listed on the NYSE.

One Year Total Return for S&P 500 and NIO
Source: TradingView.

NIO Earnings History

NIO reported mixed financial results in its Q3 FY2021 earnings report. The company reported a loss per share that was much bigger than analysts expected. Revenue, however, beat analysts' expectations rising 116.7% compared to the year-ago quarter. But revenue growth continued to slow from the pace set in the previous two quarters. NIO said in its earnings press release for the quarter that in spite of continued volatility in its supply chain it was working closely with its partners to secure supply and production for the fourth quarter.

In Q2 FY2021, NIO reported financial results that beat analysts' consensus estimates. The company reported its smallest loss per share in at least the past ten quarters. Revenue rose 127.2% year over year (YOY). But even that robust pace was a sharp slowdown from the increase of 481.8% YOY in the previous quarter. NIO said that it was still facing uncertainties regarding its global supply chain, but that it was working closely with its partners to improve overall production capacity.

Analysts expect NIO's losses per share to narrow compared to the year-ago quarter as well as the previous quarter. Revenue is expected to grow 46.8% YOY, its slowest pace since the company reported a revenue decline in the first quarter of FY 2020. For full-year FY 2021, analysts expect NIO's loss per share to widen from the previous year, but it would be the second smallest annual loss per share in the past five years. Annual revenue is expected to grow 119.1%, its fastest pace in at least the past three years.

NIO Key Stats
  Q4 FY2021 Q4 FY2020 Q4 FY2019
Earnings Per Share (Yuan) -0.57 (estimate) -1.05 -2.81
Revenue (Billion Yuan) 9.7 (estimate) 6.6 2.8
Automobiles Delivered 25,034 (actual) 17,350 8,220

Sources: Visible Alpha and NIO Inc.

The Key Metric

As mentioned above, investors are also watching the number of automobiles NIO sells each quarter. The number of automobiles sold is also referred to as vehicle deliveries by the company. NIO generates some revenue from the other products and services it provides, but the majority of revenue is derived from vehicle sales. The company makes deliveries of three types of vehicles: the ES8, the company's six-seater or seven-seater flagship smart electric SUV; the ES6, the company’s five-seater high-performance smart electric SUV; and the EC6, the company’s five-seater electric coupe SUV. The number of vehicle deliveries provides an indication of the demand for NIO's vehicles as well as the company's ability to scale production. For NIO, that ability has run into challenges amid the global chip shortage and other supply chain constraints. However, China's shortage of auto chips has been easing.

NIO's automobile sales have risen significantly over the past few years. In FY 2018, the company sold a total of 11,350 vehicles. That number rose 81.2% through to the end of FY 2019. The pace of growth accelerated to 112.6% in FY 2020 as NIO delivered approximately 43,730 vehicles during the year. The acceleration trend continued into the first quarter of FY 2021 with vehicle deliveries expanding 422.7% YOY. Growth slowed to 111.9% YOY in Q2 FY 2021 and again to a pace of 100.2% YOY in the third quarter. For the most recent fourth quarter, growth in vehicle sales slowed dramatically to a pace of 43.7% YOY. For full-year FY 2021, NIO's vehicle deliveries expanded 109.1% to a total of 91,429.

Article Sources

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  2. The Wall Street Journal. "Chinese Auto Stocks Drop as Troubles Pile Up."

  3. NIO Inc. "NIO Inc. to Report Fourth Quarter and Full Year 2021 Financial Results on Thursday, March 24, 2022."

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  5. NIO Inc. "NIO Inc. Provides December, Fourth Quarter and Full Year 2021 Delivery Update."

  6. NIO Inc. "NIO Inc. Successfully Listed on the Main Board of the Stock Exchange of Hong Kong."

  7. Visible Alpha. "Financial Data."

  8. NIO Inc. "NIO Inc. Reports Unaudited Third Quarter 2021 Financial Results."

  9. NIO Inc. "NIO Inc. Reports Unaudited Second Quarter 2021 Financial Results."

  10. Visible Alpha. "Financial Data."

  11. NIO Inc. "Form 20-F for the fiscal year ended December 31, 2020," Page 100.

  12. The Wall Street Journal. "Chinese Auto Stocks Drop as Troubles Pile Up."

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