Shares head toward for 2nd-best one-day gain in their history, on record trading volume
Shares of Nio rocketed on heavy volume Monday, after the China-based electric-vehicle maker reported a third-quarter loss that narrowed more than expected as revenue and vehicle deliveries surged, and provided an upbeat outlook for the current quarter.
Nio Inc. NIO, +11.96% reported a net loss for the quarter to Sept. 30 of 2.52 billion renminbi ($352.8 million), or RMB2.48 per ordinary share, after a loss of RMB9.76 billion, or RMB42.59 a share, in the same period a year ago.
Excluding nonrecurring items, such as share-based compensation expenses and accretion on redeemable non-controlling interests to redemption value, the adjusted loss was RMB2.45 billion, or RMB2.38 a share, beating the FactSet consensus of a loss of RMB2.53 a share.
Revenue increased 25.0% to RMB1.84 billion ($257.0 million), above the FactSet consensus of RMB1.70 billion.
Vehicle deliveries totaled 4,799 vehicles, including 4,196 ES6s and 603 ES8s, representing a 35.1% increase from the sequential second quarter. The ES6 is the 5-seater high-performance sport-utility vehicle (SUV), which began deliveries in June, and the ES8 is Nio’s flagship SUV, which began deliveries a year earlier.
The stock ran up as much as 101.2% intraday before paring gains to close up 53.7% at $3.72, but still lead all gainers listed on the New York Stock Exchange. Volume spiked to 433.8 million shares, compared with the full-day average of about 36.9 million shares, and enough to make the stock the most actively traded on major U.S. exchanges.
Shares posted the second-biggest one-day gain since it went public in the U.S. on Sept. 12, 2018, behind only the record rally of 75.8% on Sept. 13, 2018. Volume was by far the heaviest on record, well above the previous record of 184.6 million shares on Nov. 5, 2019.
For the fourth quarter, Nio said it expects revenue of RMB2.81 billion, well above the FactSet consensus of RMB2.07 billion, while deliveries are expected to spike up to jump to over 8,000 vehicles.
“The electric vehicle sector experienced substantial softness in the second half of 2019 after the reduction of EV subsidies in China,” said Chief Executive William Bin Li. “Despite the challenges, NIO’s sales improved solidly since September.”
“Facing a continuous soft auto market, we strongly believe the smart premium EV sector will outperform the industry in its growth rate in the foreseeable future,” said Chief Financial Officer Wei Feng.
Helping to boost the company’s third-quarter results, Nio said it implemented cost-control measures to improve efficiency, resulting in a 18.1% reduction in selling, general and administrative (SG&A) expenses from the second quarter and a 21.3% drop in research and development expenses.
Nio’s stock has run up 138.5% over the past three months but was still down 41.6% year to date. In comparison, shares of U.S. rival Tesla Inc. TSLA, +1.00% have rallied 24.6% this year and the S&P 500 index SPX, -0.18% has climbed 28.5%.
The shares have now nearly tripled since closing at a record low of $1.32 on Oct. 1, 2019. The stock’s record close of $11.60 was reached the day after it went public (Sept. 12, 2018), and an initial public offering price of $6.26 a share.