BYD and NIO Stock: A Dangerous Rival from Shanghai?

BYD and NIO Stock: A Dangerous Rival from Shanghai?


Dear reader,

It was just over a week ago that Chinese tech stocks all fell by double digits. The two car manufacturers BYD and NIO were no different. It was the market’s response to the new government team in Beijing issued by state and party leader Xi Jinping, who, according to observers, is considering more government control and a greater role for the CP in the economy. But shares of BYD and NIO have recently recovered significantly. Because it seems so different.

NOK and light and shade

At BYD, the already quarterly report was undoubtedly responsible for restoring investor confidence, which showed strong growth rates. In the case of NIO, on the other hand, investors won’t know more until November 11, when the upcoming company plans to present its Q3 figures. After all, there was now a report of new registrations in October, which NIO likes to sell as a success – but on closer inspection it is not.

NIO delivered a total of 10,059 vehicles in October, “which corresponds to an increase of 174.3 percent compared to the previous year”, as someone did not forget to mention. Shipments included 5,979 smart electric SUVs, including 2,814 ES7s, and 4,080 premium electric sedans, including 3,050 ET7s and 1,030 ET5s. What NIO did not mention, however, was the comparison with the previous month – perhaps for good reason: NIO had delivered 10,878 electric vehicles in September, a decrease of almost eight percent.

NIO participation for less than 10 euros again

However, NIO then gave an explanation for this: The production and delivery of the car “were hampered by operational challenges at our plants and the drop in the value of supply due to the situation of COVID-19 in some parts of China”, as stated in the brief. Now fundscene.com is reporting that NIO has temporarily suspended production at two of its factories in the Chinese city of Hefei due to corona restrictions. Maybe the reason for that It’s a stock after the most recent low for the year of EUR 8.60, it briefly broke the EUR 10 mark again on Wednesday, but was unable to sustain it – and still lost half its value in the last three months.

NIO ET7 is convincing in RTL test drive

But in fact, recently there has been praise for NIO, from RTL: Testers drove the ET7 – and came to a positive conclusion: “A dangerous opponent of Tesla from Shanghai!” NIO is not the only manufacturer from China, pushing Germany with electricity. cars. “But the new brand from Shanghai probably has the best prospects of getting a place here,” was the verdict. This is mainly due to the unique operating concept and simple registration model. And in the future, replaceable batteries and pre-installation of equipment for autonomous driving must also bring great benefits. “That’s why Nio can be dangerous for its model Tesla,” it says.

There was no feeling of driving the BYD Tang, which according to Autozeitung can now be pre-ordered in Germany and the rest of Europe, but the first seat test was able to convince the expert. In the electric car, the first thought was: “The seats remind me a lot of BMW.” But, he believes, imitating role models can only produce good things. The conclusion then falls accordingly. In terms of price and technology, the BYD Tang is on par with competition such as the BMW iX3. “That kind of equipment has to make up for what the German public is probably missing in terms of visuals.”

BYD with impressive quarterly figures

BYD has long been successful in China, and the manufacturer sold more than 200,000 vehicles for the first time in September. However, sales figures for October have not yet been published. Car and battery manufacturers are convinced by its quarterly report presented a week ago:

  • BYD’s sales in the third quarter of 2022 increased by 115 percent year-on-year to equal $15.23 billion.
  • Net profit from July to September period was around 788.75 million US dollars
  • Profit from the first nine months increased by 281 percent year-on-year to $1.28 billion.

No wonder BYD stock on the day of publication from the daily low of EUR 20.84, which was also the lowest price since March, back to EUR 22.10. By Thursday morning, the paper had improved to EUR 24.50. Within a week, BYD’s stock has risen by nearly eleven percent. Analysts also expect a lot:

BYD’s stock price targets remain high

Jefferies, for example, had cut the price target on BYD shares from 354 Hong Kong dollars to 242 HKD based on the data, but at the time of publication the shares were listed at just 175 HK dollars. So the bank of America saw a 40 percent chance, of which about 30 percent right now remains. UBS was more convinced:

target price price capacity
Jefferies 242HKD +29.1%
UBS 345HKD +84.0%
Debt Securities 328HKD + 74.9%

According to the investor page Mwanahisa, the analyst consensus is currently the target price for BYD shares at HKD343. At the current level of 187.50 HKD, this promises a price potential of more than 80 percent. Not surprisingly, of the 37 analysts surveyed by Bloomberg, 35 recommend buying and two recommend holding the share.

Should Nio investors sell immediately? Or is it worth starting?

What will Nio do now? Is entry worth it or should investors sell instead? Find the answers to these questions and why you need to act now in Nio’s current analysis.