TLDR
- NIO stock fell premarket Thursday after White House announced new tariffs on auto imports
- NIO plans to offer up to 118.79 million Class A ordinary shares for R&D funding and balance sheet strengthening
- Company warned investors to expect weak Q1 results with delivery of up to 43,000 vehicles
- NIO recently received investments from Hefei government-backed funds (~$455M) and Abu Dhabi’s CYVN Holdings ($2.94B)
- Q4 revenue was 19.70B yuan ($2.70B), up 15.2% YOY, but below analyst estimates of $2.85B
Share Offering Announcement
NIO Inc. announced on Thursday its proposal to offer up to 118.79 million Class A ordinary shares in offshore transactions. The Chinese electric vehicle manufacturer plans to conduct these transactions outside the United States to non-U.S. persons.
The company stated it would use the proceeds from this equity placement to fund research and development of smart electric vehicle technologies. The funds would also help develop new products and strengthen its balance sheet.
NIO emphasized that these shares have not been registered under the U.S. Securities Act. They will not be offered to members of the public in Hong Kong or Singapore.
Stock Performance and Tariff Impact
NIO shares traded lower in Thursday’s premarket session. The decline followed an announcement from the White House about new tariffs.
President Trump plans to introduce new tariffs on auto imports. This announcement came during a press conference on Wednesday.
The tariff news impacted various automakers’ stocks. NIO was among those affected by this development.
Q1 Expectations and Recent Performance
The company recently warned investors about underwhelming first-quarter results. NIO expects to deliver up to 43,000 vehicles by March 31.
The projected revenue for Q1 is approximately 12.9 billion yuan. This translates to about $1.8 billion.
This cautious outlook follows the company’s fourth-quarter performance. NIO reported Q4 revenue of 19.70 billion Chinese yuan ($2.70 billion).
This represented a 15.2% increase year-over-year. It was also up 5.5% from the previous quarter.
However, the Q4 results fell short of analyst expectations. Analysts had estimated revenue of $2.85 billion for the quarter.
Financial Results and Losses
NIO reported an adjusted loss per American Depositary Share (ADS) of 3.17 Chinese yuan. This equates to a 43-cent loss.
The loss was greater than the 2.81 Chinese yuan loss reported in the same quarter of the previous year. Analysts had predicted a slightly smaller loss of 42 cents per ADS.
These financial challenges come despite significant investment in the company. NIO has received substantial funding from strategic investors in recent years.
The company secured a 3.3 billion yuan (approximately $455 million) investment from Hefei government-backed funds. Additionally, NIO received a $2.94 billion capital injection from Abu Dhabi’s CYVN Holdings in 2023.
These investments have helped support the company’s operations. However, NIO continues to face challenges in achieving profitability in the competitive electric vehicle market.
The new share offering represents another effort to secure funding. This comes as the company navigates both internal financial challenges and external market pressures like potential new tariffs.
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