UBS Initiates NIO H-Shares at Buy, HK$43 PT
UBS analyst Paul Gong initiates coverage on NIO Inc (9866:HK) (NYSE: NIO) with a Buy rating and a price target of HK$43.
“We initiative coverage on Nio-H with a Buy rating.
Nio has been beating investors’ expectations YTD for its profitability improvement, despite a muted share price performance.
While investors appear to remain sceptical about the domestic car market, we believe Nio’s premium brand positioning and customer loyalty, together with a refresh of the ES6 and ET5 models in 2027E, will continue to drive revenue growth and margin improvement.
While China’s overall car market is in a low-growth stage and subject to volatilities, the premium market should continue to grow due to rising affordability and wealth accumulation.
As volume growth of Xiaomi and Huawei Harmony-affiliated brands slow and Germany’s combustion cars continue to lose market share, we see market share gain opportunities for China’s premium EV brands like Nio.
This year, Nio has been the only premium brand besides Zeekr with: 1) 50%-plus YTD volume growth; 2) positive ASP growth YoY; and 3) sustained sales of over 10k/month after six months from launch.”
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