(Yicai Global) Jul 4 – Nio shipped a record number of new energy vehicles in June, despite being the subject of a US short-selling report accusing the Chinese electric car startup of screwing up its books. A number of global investment banks have questioned the report’s claims.
Nio sold 12,961 electric vehicles last month, a 60.3 percent increase from the same period last year, to hit a monthly high, the Shanghai-based automaker said on July 1. In the second quarter, sales jumped 14.4% year-on-year to 25,059 units. . The company has now recorded positive growth for nine consecutive quarters.
“Nio likely uses unconsolidated related party to exaggerate revenue and profitability,” US short seller Grizzly Research said in a June 28 report. Grizzly believes Nio used the sales to Wuhan Weineng, a joint venture in which Nio has a 19.8% stake. stake, to boost its turnover and net income.
Wuhan Weineng was established in August 2020 by Nio and several other companies, including battery giant Contemporary Amperex Technology, to provide battery rental services to Nio car owners.
Last September, Nio sold 40,000 batteries to Wuhan Weineng, but the joint venture only had 19,000 orders for batteries as a service according to its recent fundraising prospectus, according to the Grizzly report. Thus, Nio shipped an excess amount of batteries to Wuhan Weineng, exaggerating its business revenue and net profit in the first nine months of last year by 10 and 95 percent, respectively, he said.
The report misinterpreted the data and is based on incorrect information, the firm told Yicai Global on June 29. The EV startup has filed proceedings against the short seller and will issue an announcement shortly, she said.
It’s entirely possible that Nio had 40,000 BaaS users between the fourth quarter of 2020 and the third quarter of last year, Japanese financial services firm Daiwa Capital Markets said in a research report. Wuhan Weineng reported assets of 19,000 batteries to raise funds, he added.
Every battery owned by Wuhan Weineng has a subscriber, U.S. investment bank JP Morgan Chase & Co said.
Nio’s third-quarter sales are expected to rise 80% from the prior quarter, and the company is expected to achieve a 30% year-over-year increase in the fourth quarter, New York-based JP Morgan said.
US investment bank Morgan Stanley maintains an “overweight rating” for Nio with a price target of $31 per share.
Nio’s actions in Hong Kong [HKG:9866] was trading down 4.07% at 165 HKD ($21) as of 12 p.m. China time today. The stock has lost 14% of its value since the release of the short selling report. Its shares listed in the United States [NYSE:NIO] closed down 1.66% on July 1 at $21.36 apiece.
Editors: Xu Wei, Kim Taylor