It hasn’t been a pretty past one year for Nio (NYSE:NIO), as shares of the Chinese electric vehicle (EV) company have shed nearly 30% over the period. This decline comes in light of EV price wars and a weak Chinese economy.
At the same time, Nio’s deliveries are steadily growing. During 2023, the company delivered 160,038 vehicles, up by 30.7% year-over-year (YOY). Sales growth didn’t match the pace of deliveries, tallying in at $7.83 billion and up by 12.9% YOY. One of the reasons why is that vehicle margin was 9.5% compared to 13.7% during 2022. Gross margin was 5.5%, down from 10.4%.
Yesterday, HSBC analyst Yuqian Ding lowered his NIO stock price target to $7.90 from $10.20 while maintaining a “buy” rating. Ding was surprised at Nio’s fourth-quarter net loss, as he underestimated its marketing and research and development costs. However, the analyst believes that Nio has already priced in any potential headwinds.
Ding expects Nio’s margins and volume to improve starting in Q2. For 2024 to 2026, he forecasts a volume growth compound annual growth rate (CAGR) of 36%, up from his prior 2023-to-2025 estimate of 30%. The analyst also lowered his 2024 and 2025 EPS estimates in light of dilution and a higher operating expense ratio for Nio’s new brand launch.
5 Big Investors Betting on NIO Stock
Tracking institutional ownership is important, as these large investors provide liquidity and support for stocks. During Q4, 468 13F filers disclosed a stake in NIO stock, an increase of nine filers from the previous quarter. These filers own a total of 415.61 million shares, up by 1.6% from 409.07 million shares.
Hedge funds, whose data is included in 13F metrics, appeared to be more bullish. While 79 hedge funds own NIO, the same amount as last quarter, total shares owned by hedge funds increased by 30% to 59.85 million shares.
With that in mind, let’s take a look at Nio’s largest institutional shareholders:
- CYVN Investments: 418.83 million shares. CYVN’s stake is accurate as of Feb. 26.
- Tencent Holdings (OTCMKTS:TCEHY): 124.11 million shares. Tencent’s stake is accurate as of June 20, 2023.
- Baillie Gifford: 114.63 million shares. Baillie sold 268,515 shares during Q4.
- BlackRock (NYSE:BLK): 62.62 million shares. BlackRock sold 1.38 million shares during Q4.
- State Street (NYSE:STT): 21.54 million shares. State Street acquired 509,444 shares during Q4.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
