尽管第三季度超预期，竞争可能已被低估

Competition likelyunderestimateddespite 3Q beat Maintain HOLD.Despite 3Q25 GPM beat, we still project a net loss in 4Q25.We thinkthat management’s key assumption for FY26E underestimatescompetition and salescannibalization. We project net losses in FY26-27E tonarrow significantly, but sustainable profits are in doubt, in our view, which 3Q25 GPM beat with weak 4Q25 sales guidance.NIO’s 3Q25 revenuewas in line with our prior forecastwhile its GPM was about 3.2ppts higherthan our projection.The beat was probably due to higher margins from the China Auto ES6,EC6,ET5andET5T. SG&A and R&D expenses combined wereabout RMB120mn lower than our estimates. That, along with higher GPMand greater investment income, resulted in a net loss of RMB3.66bn in3Q25, about RMB890mn narrower than our forecast. On the other hand,the company’s sales guidance of 120,000-125,000 units for 4Q25 was 4Q25 breakeven still unlikely.Webelieve thatmanagement has turnedmore cautious about 4Q25 non-GAAP breakevennow vs.2Q25 earningscall.We believeNIO’soverall4Q25 sales guidance andtheES8salestarget implyasales volume peak in Oct 2025 (11,722 units) for theOnvoL90. Although we revise up our 4Q25 GPM forecast to 17.1% (with vehicleGPM of 17.9%, in line with its guidance of 18%), we still estimate a GAAPnet loss of RMB1.6bn and a non-GAAP net loss of RMB0.7bn in 4Q25, aswe believe it is unrealistic to controlits non-GAAP SG&A expenses in 4Q25 Linearextrapolation is not suitablegivenChina’s highly competitiveautodynamics.Management aims to turn profitable in FY26E with avehicle GPM assumption of 20%, as it believes more large-size SUVs (theNIOES8,OnvoL90and three new models in FY26E) would improveproduct mix next year. Suchassumptionhasa key prerequisite:strongsales volume, which requires very competitive pricing in China. As almost Source: FactSet Valuation/Key risks.We maintain our HOLD rating and cut our ADR/H-share target prices from US$7.00/HK$55.00 to US$6.40/HK$50.00, basedon 0.8x (prior 0.9x) our revised FY26Esalesto reflect the recent weakmarket sentiment on Chinese auto sector.Key risks to our rating and target Disclosures& Disclaimers Analyst Certification The research analyst who is primary responsible for the content of this research report, in whole or in part, certifies thatwith respect to the securities or issuerthat the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to the date of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3)serve as an officer of any of the HongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies covered in this report. CMBIGM RatingsBUY : Stock with potential return of over 15% over next 12 monthsHOLD: Stock with potential return of +15% to-10% over next 12 monthsSELL: Stock with potential loss of over 10% over next 12 monthsNOT RATED: Stock is not rated byCMBIGM :Industry expected to outperform the relevant broad market benchmark over next 12 months:Industry expected to perform in-line with the relevant broad market benchmark over next 12 months:Industry expected to underperform the relevant broad market benchmark over next 12 months Important Disclosures There are risks involved in transacting in any securities. The information contained in this report may not be suitable forthe purposes of all investors.CMBIGMdoes not provide individually tailored investment advice. This report has been prepared without regard to the individual investment objectives, financial positionor special requirements. Past performance has no indication of future performance, and actual events may differ materially from that which is contained in thereport.The value of, and returns from, any investments are uncertain and are not guaranteed and may fluctuate as a result of their dependence on the or its affiliate(s) to whom it is distributed. This report is not and should not be construed as an offer or solicitation tobuy or sell any security or any interest insecurities or enter into any transaction.NeitherCMBIGMnor any of its affiliates,shareholders, agents, consultants, directors, officers or employees shall beliable for any loss, damage or expense whatsoever, whether direct or consequential, incurred in relying on the information contained in this report.Anyonemaking use of the information contained in this report