BYDDF - BYD Company Limited
| Previous Close | 4.8700 |
| Open | 4.8320 |
| Bid | 0.0000 x 0 |
| Ask | 0.0000 x 0 |
| Day's Range | 4.8320 - 4.8900 |
| 52 Week Range | 4.6500 - 7.6000 |
| Volume | 207,629 |
| Avg. Volume | 246,998 |
| Market Cap | 15.628B |
| Beta (3Y Monthly) | 1.31 |
| PE Ratio (TTM) | 34.96 |
| EPS (TTM) | 0.1390 |
| Earnings Date | N/A |
| Forward Dividend & Yield | 0.03 (0.58%) |
| Ex-Dividend Date | 2019-06-11 |
| 1y Target Est | N/A |
- Reuters
China's auto industry discusses ways to boost rural car sales: sources
BEIJING/SHANGHAI, Nov 11 (Reuters) - China's auto industry executives met with government officials over the weekend to discuss ways to promote higher car sales in rural areas, sources familiar with the matter said. The country's car manufacturers are grappling with the pressures of falling sales in the world's largest car market and are seeking new policies. A senior official at the China Association of Automobile Manufacturers (CAAM), Zeng Guang, confirmed to Reuters that the meeting had been organised in Beijing by the association's magazine Auto Review.
- Simply Wall St.
We Think BYD (HKG:1211) Is Taking Some Risk With Its Debt
Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of...
- Reuters
BYD, Toyota to set up research venture to develop electric vehicles
TOKYO/SHANGHAI (Reuters) - Chinese electric car maker BYD Co Ltd and Japan's Toyota Motor Corp said on Thursday they planned to set up a joint venture to design and develop battery electric cars as they ramp up efforts to produce zero emissions vehicles. The two companies said in a statement that they would each invest 50% of the capital needed to establish the company, which will be set up next year and be based in China. Widely considered a late comer in embracing battery EVs, compared with rivals including Nissan , Toyota had flagged in June that it aimed to get half of its global sales from EVs, including gasoline hybrids, by 2025, five years ahead of schedule.
- Reuters
REFILE-UPDATE 1-BYD, Toyota to set up research venture to develop electric vehicles
TOKYO/SHANGHAI, Nov 7 (Reuters) - Chinese electric car maker BYD Co Ltd and Japan's Toyota Motor Corp said on Thursday they planned to set up a joint venture to design and develop battery electric cars as they ramp up efforts to produce zero emissions vehicles. The two companies said in a statement that they would each invest 50% of the capital needed to establish the company, which will be set up next year and be based in China. Widely considered a late comer in embracing battery EVs, compared with rivals including Nissan, Toyota had flagged in June that it aimed to get half of its global sales from EVs, including gasoline hybrids, by 2025, five years ahead of schedule.
- Financial Times
Number 214 to Highgate leads UK’s electric bus charge
A ride on the number 214 bus between Shoreditch and Highgate provides a glimpse of public transport of the future. The unremarkable-looking single decker is one of more than 200 fully electric buses now running in the capital. It is the first stage of a “complete revolution” on Britain’s roads, according to Gareth Powell at Transport for London.
- Reuters
Buffett-backed BYD warns on 2019 profit as Chinese market contracts
Chinese electric car maker BYD Co Ltd said on Tuesday it expected full-year net profit to fall by as much as 43%, as sales of new energy vehicles in the world's biggest auto market plunged following a cut in government subsidies. The Shenzhen-based company, which is backed by U.S. investor Warren Buffett and whose products include battery electric and plug-in hybrid vehicles, posted net profit of 119.72 million yuan ($16.95 million) in the third quarter, down 88.6% from 1.05 billion yuan a year earlier. It said 2019 profit would be between 1.58 billion yuan and 1.77 billion yuan, down from 2.78 billion yuan a year earlier.
- GuruFocus.com
How to Avoid Bankruptcy: Tesla's 3rd-Quarter Outlook
Positive quarterly results contend with debt and potential automobile industry downturn Continue reading...
- Oilprice.com
The Billionaire Battle For EV Dominance
Tesla and BYD are in a race to dominate the global EV market and, with Musk and Buffett backing their respective companies, this billionaire battle won’t slow down any time soon
- Simply Wall St.
Why You Should Like BYD Company Limited’s (HKG:1211) ROCE
Today we are going to look at BYD Company Limited (HKG:1211) to see whether it might be an attractive investment...
- Simply Wall St.
Can We See Significant Insider Ownership On The BYD Company Limited (HKG:1211) Share Register?
A look at the shareholders of BYD Company Limited (HKG:1211) can tell us which group is most powerful. Insiders often...
- Bloomberg
China’s Tesla Rival NIO Plunges 26% on Escalating Losses
(Bloomberg) -- Shares of Chinese electric-vehicle makers and suppliers fell after a worse-than-expected quarterly loss for NIO Inc., the country’s answer to Tesla Inc., exacerbated concerns that a bubble in the world’s largest EV market may be bursting.BAIC Motor Corp., which BloombergNEF says brought in more than $4 billion in EV revenue last year, dropped 1% in Hong Kong, while BYD Co. closed down 4.1%, its biggest loss in over a month. Wuxi Lead Intelligent Equipment Co. retreated 4.5% in Shenzhen. NIO plunged 20% to a record low of $2.17 in New York on Tuesday after announcing its results and thousands of job cuts.The dire situation has prompted NIO, which is backed by technology giant Tencent Holdings Ltd., to raise $200 million from founder William Li and a Tencent affiliate, and to plan the spin off some businesses. The company’s U.S.-listed shares are down more than 80% from their peak following last year’s IPO.“People are wondering whether the company can continue to survive,” said Jason Chen, an analyst from Blue Lotus Capital Advisors. Bernstein analyst Robin Zhu struck a similar tone with a report titled “Tick Tock, Tick Tock,” estimating that NIO has only a few weeks of liquidity left.The issues specific to Shanghai-based NIO include cost overruns and major recalls.The company said Wednesday it has rescheduled its earnings conference call to 8 a.m. New York time after canceling the original one planned for Tuesday.More broadly, the automaker’s struggles lend credence to mounting concerns that China’s state-sponsored support of the industry inflated a bubble that’s poised to pop. The nation’s sales of EVs and “new-energy” vehicles fell for a second straight month in August as the government scaled back subsidies. China accounts for half of the world’s EV sales.“The latest industry sales and pricing data have not shown improvement, prompting us to fear the anticipated recovery in industry demand in September and 4Q may prove more modest than expected,” JPMorgan analysts Ryan Brinkman and Rebecca Wen wrote in a note, where they also withdrew their price target on NIO.NIO’s second-quarter net losses increased 83% from a year earlier to 3.29 billion yuan ($462 million), according to a statement. The deficit was worse than the 2.6 billion yuan average estimate of two analysts surveyed by Bloomberg, and it was the company’s second-largest based on available data dating back to 2017.NIO has accumulated about $6 billion in losses since it was founded by Li, who is also the chief executive officer, in 2014. Fire risks led to a mass callback of nearly 5,000 vehicles in June, a significant portion of the 17,550 units NIO had sold as of the end of May.Li said in the statement that a target has been set to reduce global headcount to 7,800 by the end of the third quarter, from more than 9,900 in January. There will be additional restructuring and some non-core businesses will be spun off by the end of the year, he said, without elaborating.A Tencent affiliate and Li agreed to buy $200 million of convertible notes through a private placement that’s expected to close before the end of the month, NIO has said. The company canceled its earnings conference call without explanation, a move Chen called “very strange.”Though revenue surged more than 3,000% from a year earlier, that was a time when the company was just getting started to sell cars. It fell 7.5% from the first quarter.NIO delivered 11% fewer vehicles compared with the first quarter, but it forecast the number will rebound to between 4,200 and 4,400 units in the third quarter. Third-quarter revenue will rise as much as 10% from the previous three months, the company said.NIO previously scrapped plans for a manufacturing plant in Shanghai after the government decided to provide support to Tesla, which aims to start production in China this year -- another challenge for Li’s company. Annual capacity at the Tesla facility could eventually top 1 million vehicles, chief executive Elon Musk has said.(Updates share-price moves.)\--With assistance from Courtney Dentch.To contact Bloomberg News staff for this story: Chunying Zhang in Shanghai at czhang714@bloomberg.netTo contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, ;Young-Sam Cho at ycho2@bloomberg.net, Will Davies, Kevin MillerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Reuters
BYD's profit triples as China's electric car boom continues
Chinese electric car maker BYD Co Ltd posted a 203.6% rise in first-half profit on Wednesday, as China's new energy vehicle market continues to surge. The Shenzhen-based company, which is backed by U.S. investor Warren Buffett and whose products include battery electric and plug-in hybrid vehicles, posted net profit of 1.45 billion yuan ($205.29 million), up from 479.10 million yuan a year earlier. BYD, whose models include the Song series and the Qin plug-in hybrid electric vehicle, aims to move to completely electric-powered vehicles.
- InvestorPlace
Nio Stock Seems Only to Have Continued Disappointment on the Horizon
Volatility is par for the course when it comes to newly-minted public companies. But with Nio (NYSE:NIO), the volatility has been even more extreme than is usual. Nio stock just can't seem to get moving, but there are reasons.Source: Shutterstock When the company came public in September 2018, the belief was that the company would somehow be the next Tesla (NASDAQ:TSLA). But unfortunately, Nio stock has been mostly in a grueling downward slide. Consider that since the offering the shares have lost about half of their value.So what's going on here? Why all the disappointment? Well, despite Nio's innovative car models, the deliveries have been subpar. Just look at July, which saw a 38% drop on a quarter-over-quarter basis to a mere 837. That's right. Less than 1,000!InvestorPlace - Stock Market News, Stock Advice & Trading TipsGranted, a big factor was a major recall of close to 5,000 ES8 SUVs. Note that there were incidents of fires erupting from faulty battery packs (there were short-circuits in some because of the wearing down of wires).Now it is encouraging that NIO was proactive and was able to solve the problem in about half the time expected. In fact, the company thinks the impact from the recall is mostly temporary. * 15 Growth Stocks to Buy for the Long Haul The expectation is that August delivers will come to anywhere from 2,000 to 2,500. A big help will likely be the new ES6, which is a five-passenger electron crossover SUV. During July, the delivers came to 673. A Closer Look at NioOK, then is this a bullish signal for Nio stock? Actually, I still think investors should be cautious. Keep in mind that the company still faces considerable challenges. Here's just a few:Competition: While the market in China is large for electric vehicles -- and growing -- there are also about 486 registered manufacturers in the country. Many are fairly small. But of course, there are some large ones like BYD (OTCMKTS:BYDDF) and Beijing Electric Vehicle Co. So it is tough for a company like Nio to rise above the crowd, especially when it has only about 2% market share. Something else: TSLA is gearing up to sell its Model 3 in China during the latter part of the year.Subsidies: The Chinese government has cut back on assistance for electronic vehicles. The main reason is to encourage more competition. But then again, there has also been a reduction in demand, such as for high-priced vehicles.Macroeconomy: While the Chinese economy continues to grow, the pace has decelerated. A big reason has been the U.S.-China trade war, but there are other issues like debt and imbalances, such as in the real estate markets.Business Model: Nio does not manufacture its own vehicles. Instead, the company outsources this to a state-owned operator (Nio did try to build its own plant but has since abandoned the effort). While this helps to lower the capital costs, it does mean that margins are generally lower. Bottom Line On Nio StockThe prospects for EVs are bright in China. But again, the competition is intense and the economic uncertainty will likely remain a big problem.In the meantime, NIO continues to post significant losses. Note that in the latest quarter they came to $366 million. And there is only about $1.12 billion in the bank and the debt is at $1.35 billion.So within the next year, it would be no surprise that the company will do another capital raise - which could be highly dilutive given the low stock price. That is, for now, it's probably best to hold off on NIO stock.Tom Taulli is the author of the book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 15 Growth Stocks to Buy for the Long Haul * 5 More Cloud Stocks With Plenty of Potential * 5 Clean Energy ETFs to Buy for 2019 The post Nio Stock Seems Only to Have Continued Disappointment on the Horizon appeared first on InvestorPlace.
- Simply Wall St.
Should We Worry About BYD Company Limited's (HKG:1211) P/E Ratio?
Today, we'll introduce the concept of the P/E ratio for those who are learning about investing. We'll look at BYD...
- InvestorPlace
Nio Stock Still Speculative in Light of Tesla’s China Expansion
Nio (NYSE:NIO) stock has bounced back in the past month. Since July 1, shares have rallied nearly 23%, rising from $2.67/share to $3.28. Negative investor sentiment has pulled back, with speculators reentering NIO stock. Source: Shutterstock But with heavy competition, Nio has its work cut out for them. Can the company become a viable competitor to Tesla (NASDAQ:TSLA) and rival China-based EV makers?While shares have seen a "dead cat bounce" no doubt, I continue to believe NIO is not a buy. Short-term, bits of good news could boost the Nio stock price. But long-term, there are better opportunities elsewhere. Here's my thesis for why investors should look at the facts and avoid Nio stock.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Financial Maelstrom AheadThe EV maker announced on July 10 that it delivered 3,553 of its ES8 and ES6 vehicles in the second quarter of 2019. This figure exceeded guidance of 2,800 to 3,000 deliveries. This crumb of good news has driven up the Nio stock price, explaining the pop since early July. However, shares remain far below the IPO price of $6.26 a share, and very far below its all-time high of $13.80 per share.Is the second quarter delivery news a sign that NIO stock is on the rise, or are these figures irrelevant? * 7 Stocks to Buy With Over 20% Upside From Current Levels The Q2 delivery numbers seem less impressive compared to Q1 deliveries of 3,989. But with the release of the smaller-sized ES6 model in June, Q3 delivery growth could be huge. There were 12,000 pre-orders alone for the E6. While that model will likely cannibalize sales of the E8, the company is inching closer to critical mass.To be sure, Nio has a far ways to go before it scales to profitability. As operating losses continue, the company may be entering a financial maelstrom. As I mentioned in my July 5 article, the firm does not have its own manufacturing facilities. Instead, it builds cars at a state-owned JAC Motors factory. The company is obligated to cover the factory's losses until April 2021. Dependent on equity infusions, Nio continues to be a work-in-progress.But isn't it darkest before the dawn? Could investors be getting in at a fantastic price before these headwinds are resolved?Capital infusions could help it survive long enough to scale. But with the current valuation, much of this potential upside may already be reflected in the NIO stock price. Valuation Remains a ConcernNio stock sells at a substantial enterprise value-to-sales premium to its bigger rival Tesla. NIO shares trade at an EV/Sales ratio of 4.4, compared to 2.1 for TSLA. Nio's operating performance does not explain this discrepancy. Unlike TSLA, NIO shows negative gross margins. Its financing issues make Tesla look like a blue chip. It may be unfair to compare the two companies. Tesla is much further down the path to profitability. But with Tesla's Chinese "gigafactory" coming on line within the next year, it seems foolish to think that upstart Nio has a shot.Perhaps protectionist trade policies could give the company an edge on its home turf. With the U.S.-China trade wars flaring back up, as an American company Tesla may face challenges. But NIO is not the only Chinese electric vehicle maker. Large companies such as BYD (OTCMKTS:BYDDF) are already in the space. As InvestorPlace contributor James Brumley mentioned in a recent article, even Alibaba (NYSE:BABA) has thrown its hat in the ring, backing EV startup Xpeng. * 7 A-Rated Stocks Under $10 As mentioned in my last article on the shares, the Nio stock price gets a boost from being the only Chinese EV maker trading on a major exchange. Competitors like BYD trade over-the-counter. Investors may bid up NIO stock to gain exposure to the Chinese EV growth story. But if results do not meet expectations, shares will likely move in the other direction. Look Elsewhere for OpportunityI remain skeptical on the EV maker's future prospects. Once electric cars are viable, the major auto makers will have the edge. They have the scale and pricing power to edge out these upstarts. While Tesla is on the cusp of profitability, Nio remains a long shot. With the company lacking even its own factory, they will need dilutive capital infusions in order to scale. This reduces potential upside for NIO stock.There are better growth stories out there. Vehicle manufacturing's capital-intensive nature makes it hard for upstarts to succeed. Disruptors in industries with fewer barriers to entry face better odds. With this in mind, continue to avoid Nio stock.As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 8 of the Most Shorted Stocks in the Markets Right Now * 7 Charts That Should Concern Marijuana Stock Investors * 8 Monthly Dividend Stocks to Buy for Consistent Income The post Nio Stock Still Speculative in Light of Tesla's China Expansion appeared first on InvestorPlace.
- InvestorPlace
Nio Stock Isn’t Cheap When You Factor in Competition and Recalls
During the past few weeks, Chinese electrical-vehicle manufacturer Nio (NYSE:NIO) has been in the fast lane. Nio stock up about 40% or so to $3.50. Yet the shares are still well off their highs. The stock was more than $10 in late February. Click to Enlarge Source: Shutterstock It's also important to keep in mind that the company is a recent IPO. Yet it certainly hasn't enjoyed the enthusiasm of many other operators like Zoom Video Communications (NASDAQ:ZM), Anaplan (NYSE:PLAN) and Pagerduty (NYSE:PD).But hey, IPOs can certainly make nice comebacks, right? So with Nio stock, might there be one brewing? Or should investors be skeptical?InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Dependable Dividend Stocks to Buy A Closer Look at NioWell, there are certainly some positives. Keep in mind that the sentiment for Nio stock had gotten to horrible levels. Thus a bounce back is reasonable. And there was probably short covering (this is when short sellers buy back shares to cover their positions). As of late June, about 15% of the float for Nio was shorted.But there were also some fundamental factors at work. Perhaps the most important was that the second quarter saw a pick-up in deliveries, which came to 3,553. This was above the company's quarterly guidance of 2,800 to 3,200 (albeit, this forecast was fairly conservative). In June, NIO also launched its ES6 five-seater premium SUV and the results were encouraging. Deliveries were 413.But despite all this, there are still some negative factors, and I think they could easily outweigh the positives. For example, Nio recalled more than 4,800 units of the ES8 (or close to 30% of the total deliveries for the company's history). The reason: There were three battery fires. Nio Recall WoesIt's encouraging that Nio has been proactive. Let's face it, the auto industry can be resistant to recognizing problems. Yet the recall is still something that points to quality issues, which is never a good thing for a premium vehicle. It also does not help that there are already general worries about EVs.In fact, the company's business model, which relies on the manufacturing of the vehicles from another company, could be an issue. That is, there could be more vulnerability to quality issues as Nio does not have as much control.But there is something else about the business model: It means that the margins are quite low. In other words, it could be tough for Nio to realize the benefits of the economies of scale as the company grows. And yes, this could be limiting for the stock price.It also does not help that Nio continues to burn money. During the latest quarter, the operating loss was a hefty $366 million. But the cash on hand is only about $1.12 billion and the debt load is $1.35 billion.In light of this, it would not be surprising to see another equity raise - and this would mean more dilution for the stock. Bottom Line on Nio StockEven though the Chinese government has been cutting back on subsidies, there still is considerable support to promote the EV industry. This is definitely good news for Nio stock.But then again, the company has to fight fierce competitors like BYD (OTCMKTS:BYDDF) and Beijing Electric Vehicle Co. Consider that there are nearly 486 registered EV manufactures in China! So it will be tough to stand out. It also does not help that the Chinese economy is slowing down, despite efforts to stimulate growth.All in all, there's quite a bit of risk with Nio, and it's probably best to hold off for now.Tom Taulli is the author of the upcoming book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Dependable Dividend Stocks to Buy * 10 Stocks Driving the Market to All-Time Highs (And Why) * 7 Short Squeeze Stocks With Big Upside Potential The post Nio Stock Isn't Cheap When You Factor in Competition and Recalls appeared first on InvestorPlace.
- InvestorPlace
Nio Stock Is Still Too Speculative for Most Investors
There's an old Wall Street proverb that even a dead cat will bounce if tossed from a high-enough building. In Mandarin, dead cat bounce translates to Sǐ māo tantiao or 死猫弹跳. A Chinese example of such a rally is Nio (NASDAQ:NIO).Source: Shutterstock Nio was called the "Chinese Tesla (NASDAQ:TSLA) when it went public last September. On its opening day of trading it sold for as much as $12.69 per share. Since then, except for a brief period in March, it has been all downhill.But a surprising pick-up in deliveries gave the shares a 45% rally in one week recently. With 87.4 million shares traded July 9, Nio had the highest volume on any U.S. exchange.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSo, buy, buy, buy? No, no, no. Wait, wait, wait!At least, know what you're getting into. Nio Stock and the EV RevolutionThis much is true. There's an electric vehicle revolution going on. China is at the heart of it. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond But as government subsidies have been pulled, sales have declined. Thus, it was a big surprise when the China Passenger Car Association said sales in June rose 4.9% from a year earlier.Nio itself delivered 1,340 vehicles. Deliveries for the full quarter were 3,553. Tesla, by comparison, delivered 95,200 vehicles in the second quarter. Nio is not Tesla.Before this good news, all the commentary on Nio was bad. Some 4,803 cars were recalled after the batteries in three of them caught fire. Lithium ion batteries are subject to this risk, and a short-circuit can mean big trouble.The views of our David Moadel were typical. "Can the Nio Stock Wreckage Be Salvaged?" he asked on June 28. Nio, he concluded, is a speculative bet. It was a perfect set-up for anything perceived as being good news to send the stock rocketing upward.But at its July 11 opening price of $3.69 per share, Nio is still $2.50 per share away from what had been its trading range around $6 per share last Christmas. It's a $4.2 billion market cap on $4.9 billion of 2018 revenue, on which it lost $23.3 billion. (Ouch.) Seeking HopeThat doesn't mean a speculation on Nio isn't one some young investors might want to make.The company has begun deliveries of a new "crossover," the ES6. The ES6 has a swappable battery pack, so its range can be upgraded. There's also a "hypercar" called the ES9 on the horizon, which is setting speed records. Nio is once again talking about building its own factory, rather than relying on state-owned JAC Motors.Despite the subsidy pull-back, and despite the spectre of a Tesla factory going up in Shanghai, the fact is the Chinese government remains big on electric cars, and especially big on Chinese electric car companies. The MEB platform being pushed by Volkswagen (OTCMKTS:VLKAY) could create a China-based, global standard for mass-market electrics within 5 years.In that world, a luxury Chinese electric might sell well. The Bottom LineSadly, I agree with our Thomas Niel, who warned investors away from Nio on July 5. He sees the local market as saturated, the export market subject to the trade war.I think there are better ways to play the trend. Warren Buffett has invested in BYD Company (OTCMKTS:BYDDF) He took a 9.9% stake for $282 million 10 years ago, when BYD was just a battery maker. BYD is growing faster than the Chinese electric car market, with sales of 73,172 vehicles in the last quarter.If you're going to bet on electric cars, bet on the mass market, not the class market.Dana Blankenhorn is a financial and technology journalist. He is the author of the mystery thriller, The Reluctant Detective Finds Her Family, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post Nio Stock Is Still Too Speculative for Most Investors appeared first on InvestorPlace.
- InvestorPlace
Don’t Bet on the Long Shot That Is Nio Stock Because It Won’t Pay Off
Shares of Nio (NYSE:NIO) stock have been hit hard. The Chinese electric-vehicle manufacturer currently trades at $2.60/share, down from its IPO price of $6.26/share. The Nio stock price is down more than 80% from its all-time high of $13.80/share.Source: Nio With a weak local auto market, a trade war that prevents American expansion, and a slew of issues such as battery fires, is "China's Tesla" still a strong opportunity?I say "No." Despite high expectations the company will become the "Chinese Tesla," this has yet to be realized. The company continues to generate not only losses but negative gross margins. With a weak balance sheet, the company needs continued dilutive capital infusions.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe Chinese electric vehicle market is overly saturated. And with the relaxation of foreign-ownership laws, companies like Tesla (NASDAQ:TSLA) are moving into the market as well. * 10 Stocks That Should Be Every Young Investor's First Choice Tie all of these together, and "China's Tesla" remains a long shot, with too many risks outweighing the upside. Investors have better opportunities elsewhere, and should avoid/sell their Nio shares. Nio's Local Market IssuesAccording to Reuters, Chinese car sales declined for the first time since the 1990s. April vehicle sales were down 14.6% year-over-year. Chinese electric vehicle sales have not declined, but sales growth has flattened. May 2019 EV sales were up only 1.8% YOY.To counter this slump, the Chinese government is increasing the number of car licenses. But despite this state support, the Chinese government has decided to phase out EV subsidies. The EV subsidy cut has materially impacted Nio's performance, with sales falling 50% from the previous quarter . Additional Risks Impact Nio StockThe U.S.-China trade war is another risk factor. The company expected to commence sales in America starting next year. But with all the uncertainty regarding trade, among other issues, Nio has shelved these plans.Nio continues to be reliant on third-party manufacturers. The company makes its cars at a state-owned JAC Motors facility. Nio essentially subsidizes the JAC plant's operations, with the company agreeing to compensate for losses until April 2021.Like other electric vehicle makers, battery fires have been an issue. On June 27, Quartz reported that 4,800 of Nio's flagship ES8 SUV were recalled due to battery fire issues. This was about 1/3rd of ES8s out on the road.Put all these risks together, and it is clear that the company is not ready for prime time. But despite these red flags, US investors continue to give the company an inflated valuation. Nio Stock ValuationDespite many risks, Nio stock continues to trade at a high valuation. A look at their most recent financials highlights a variety of red flags: * Vehicle sales down 54.6% YOY * Negative gross margin of 13.4% * Net loss of $395.2m ($0.38/shares) * Q2 2019 sales anticipated to decline an additional 20-30% from the first quarterTo keep the company operational, state-owned fund E-Town Capital has invested $1.45 billion into a joint venture (Nio China). This partnership will give the cash needed to operate/expand. E-Town capital will also help the company build a factory and/or find new manufacturing partners.While this arrangement keeps the company solvent, it highlights the risk of dilution. The Nio stock price could fall further if the capital infusions continue.The Nio stock price has been supported by the fact it is the only pure play Chinese EV maker trading on a major exchange. With competitors such as BYD (OTCMKTS:BYDDF) trading over-the-counter in the US, Nio is the more liquid Chinese EV play.But easy access doesn't make a good investment. The fundamentals of the company are weak. With heavy competition from more established car makers, Nio needs nothing short of a miracle to reverse their sales declines. Bottom Line on Nio Stock Of all the long-shot "story stocks" out there, Nio may be one of the least attractive opportunities. With a weak home market, wobbly balance sheet, and high expectations as "China's Tesla," the company has yet to produce results. With Tesla opening a facility in Shanghai, why invest in the "Tesla of China" when Tesla itself is in China?On the other hand, with heavy short interest, a squeeze is inevitable. But playing a short-squeeze can be like catching a falling knife. Timing the market is tough, as you can't predict the unpredictable.For the time being, NIO is a hard pass. Unless the company succeeds in gaining critical mass in its home market, I doubt it will become "China's Tesla".As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks That Should Be Every Young Investor's First Choice * 5 IPO Stocks to Buy -- According to Wall Street Analysts * The Top 10 Best Sectors in the Market for 2019 The post Don't Bet on the Long Shot That Is Nio Stock Because It Won't Pay Off appeared first on InvestorPlace.
- Reuters
UPDATE 1-Chinese electric automaker BYD opens first plant in Canada
Chinese electric vehicle maker BYD Co Ltd said on Tuesday it had opened its first plant in Canada, which will initially focus on assembling buses for the Toronto Transit Commission, a public transport agency. The 45,000 sq.ft. facility is based in Ontario and the transport agency will receive 10 electric buses with an option for 30 more, the Warren Buffett-backed company said. As traditional automakers withdraw from Canada, municipalities across the country are doubling their efforts to tackle climate change through zero-emissions transit, Ted Dowling, vice-president of BYD Canada, said.
- InvestorPlace
Do Not Hope for a Dramatic Comeback in Nio Stock
Nio (NYSE:NIO) continues to fall further into penny-stock status. Once compared to American automaker Tesla (NASDAQ:TSLA) as the "Tesla of China," Nio stock now struggles to survive.Source: Shutterstock A deal NIO has made with a government-owned organization may keep it from going to zero. However, investors should not buy at these low levels hoping it will become the next Chinese Tesla or Ford (NYSE:F). It's All About the NumbersWith a Nio stock price now just hovering above $2.50 per share, shares are cheap. However, there's a reason for this extreme discount. I do not say that because I made a mistake in referring to NIO as a "possible trade" about one month ago. It also has little to do with the fact that I constantly remind traders that so-called Chinese stocks are actually Cayman Islands-based holding companies who represent Chinese firms.InvestorPlace - Stock Market News, Stock Advice & Trading TipsFor me, it comes down to numbers. Sales of its electric vehicles (EVs) fell by about 54.6% between the fourth quarter of last year and Q1. Also, the company sold only 5,113 cars in the first four months of 2019. Sales of 1,124 vehicles in April make up only a small fraction of the 45,197 EVs sold in China. NIO faces More Competition than TeslaUnlike Tesla in the U.S., NIO faces heavy competition at home. It lags BYD Auto (OTCMKTS:BYDDF) in sales. BYD benefits from the interest of Warren Buffett as Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) bought a 25% stake in the company 11 years ago. Yes, Nio stock may have beaten its Chinese peers to the U.S. equity markets. Still, it's lost nearly 60% of its value from the initial public offering of $6.25 per share back in September. * 5 Stocks to Buy for $20 or Less Worse, conditions appear unfavorable for the entire EV sector. Tesla has lost over 40% of its value since the early summer of 2017. Moreover, investors should remember that even the largest, best-established players have not prospered.Recall that General Motors (NYSE:GM) experienced a bankruptcy 10 years ago. Since the current GM stock launched its IPO in 2010, shares have seen little appreciation. Nio Stock Should Survive but Do Little ElseAdmittedly, Nio stock offers just enough hope to investors that someone who wants to see this as a buy will continue to do so. The trade war has hammered the Chinese economy. If negotiators come up with a face-saving way out for China, that could help NIO. Moreover, the company blew away revenue estimates in the last quarter, and losses came in 13 cents per share less than expected. One analyst even predicts that the company will turn profitable in 2021.It also appears unlikely to fall to zero. As our own Dana Blankenhorn points out, Nio entered into a joint venture with GAC, the Chinese state car company. Blankenhorn rightly describes this as a "government bailout" as this means China will provide $1.45 billion to bolster the relationship. However, it will take more than a bailout to make Nio stock a profitable investment.Still, the most misleading appeal may come down to false hopes. Many investors dream of buying a penny stock that stages a dramatic comeback a few years down the line. I do not necessarily discourage such speculation with a small part of one's portfolio. However, while I expect some stocks will trade well above their current levels, autos probably won't enjoy such robust speculation. Final Thoughts on Nio StockThose hoping for outsized gains from low-priced equities will likely not profit from Nio stock. Yes, NIO operates in the same sector that has led TSLA to massive gains. However, times have changed in the EV sector and in the auto industry overall. Even Tesla stock has begun to suffer.Yes, the investment from the Chinese state automaker could avert a bankruptcy. However, survival is not prosperity. For Nio stock to deliver outsized long-term gains, it will not only have to become profitable, but must become China's market leader in EV. That's something it has never done.NIO will also have to bring long-term profits for investors. While it may turn a profit at some point, historical industry facts indicate consistent profitability is a serious challenge.Those who want to set aside a portion of their portfolio for speculation should do so. However, I would not expect those gains to come from Nio stock or any equity in this industry.As of this writing, Will Healy is long BRK.B stock. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 5 Red-Hot IPO Stocks to Buy for the Long Run * 5 Stocks to Buy for $20 or Less * 4 Dow Jones Stocks Ready to Rise Compare Brokers The post Do Not Hope for a Dramatic Comeback in Nio Stock appeared first on InvestorPlace.
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Sell Nio Stock, Buy Luckin Coffee Stock
Investors looking for a good Chinese growth stock should buy Luckin Coffee (NASDAQ:LK).Source: Shutterstock And anyone who has bought the shares of Chinese electric-vehicle maker Nio (NYSE:NIO) should dump their Nio stock and buy Luckin Coffee stock instead. Luckin Coffee Stock Is Everything That Nio Stock Is NotLuckin Coffee stock has all the characteristics of an excellent growth stock. Luckin is growing rapidly, has created a product that millions of people love, isn't facing tough competition, can easily grow a lot more and can quickly become profitable.InvestorPlace - Stock Market News, Stock Advice & Trading TipsLuckin's revenue jumped from $12.9 million in the first quarter of 2018 to $478.5 million in Q1 of 2019. Clearly, its products are resonating with millions of people in China. According to KeyBanc, the company "provides quality coffee at almost half the prices seen on the menus of Starbucks Corporation (NASDAQ:SBUX) and the British brand Costa Coffee." * 7 Stocks to Buy for the Coming Recession Another research firm, Needham, believes Luckin has a huge growth opportunity. The firm wrote that Luckin is "disrupting the coffee industry in China … and gaining market share in China's coffee market which is characterized by rapid growth," Investor's Business Daily reported. Needham started Luckin Coffee stock with a "buy" rating, while KeyBanc initiated it with an "overweight" rating. Importantly, Luckin Coffee looks well-positioned to become profitable, especially given its rapid top-line growth. In 2018, the company generated a gross profit of $308.5 million. Although its high total operating expenses of $2.4 billion prevented it from being in the black overall, the impact of the operating expenses -- many of which are fixed costs like paying executives and conducting R&D -- on its bottom line will decrease as revenue grows.Conversely, as InvestorPlace columnist Vince Martin pointed out in a piece published earlier this month, Nio is facing very tough competition, and its deliveries plunged nearly 50% in the first quarter versus the previous quarter. NIO itself has warned that its competition is becoming more formidable, even though, as Martin noted, its "market share is miniscule."Indeed, the company is competing against at least eight other electric-vehicle makers, including BYD (OTC:BYDDF), which obtained an investment from Warren Buffett, and BAIC, which is owned by the government of China. Additionally, foreign automakers, including Tesla (NASDAQ:TSLA), GM (NYSE:GM), Volkswagen (OTC:VLKAF), and Ford (NYSE:F), are preparing to sell electric vehicles in the Chinese market.In three of the last four quarterly results reported by Nio, the company's gross profit has been meaningfully negative, so it's nowhere near being profitable. Given that stat, along with Nio's tough competition and the fact that its revenue dropped meaningfully last quarter, I agree with Martin's warning that Nio stock price could easily hit zero. Luckin Stock Is a Much Better Buy Than NIO StockDespite the tremendous disparity between the companies' performance and outlook, Luckin Coffee stock is not that much more expensive than Nio stock. Luckin looks much more expensive on the surface because its price is over $18 per share and Nio stock price is barely above $2 per share. But Luckin Coffee stock has a market cap of $4.14 billion, while the market cap of Nio stock is $2.75 billion. The enterprise value-sales ratio of Luckin Coffee stock is a bit over three, while that of Nio stock is a bit under two. In other words, even though Luckin's business is so much better positioned than that of Nio's, Nio stock isn't much cheaper than Luckin Coffee stock. The Bottom Line on Luckin Coffee Stock and Nio StockLuckin's business is booming and the company faces very little competition -- it will soon be profitable.Nio's business is weakening, it faces intense competition, and it isn't going to be profitable anytime soon. * 7 High-Quality Cheap Stocks to Buy With $10 Luckin's outlook is very strong, while NIO has a good chance of going belly-up. And, yet, Luckin Coffee stock isn't that much more expensive than Nio stock. Clearly, investors looking for a Chinese growth name should dump Nio stock and buy Luckin Coffee stock.As of this writing, Larry Ramer did not own any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy for the Coming Recession * 10 Smart Dividend Stocks for the Rest of the Year * 5 Tech Stocks That Are Far Too Risky Right Now Compare Brokers The post Sell Nio Stock, Buy Luckin Coffee Stock appeared first on InvestorPlace.
