Analysis Report | NIO, BYD Target Prices Both Lowered! SenseTime Suffers Even More, Directly Slashed!

Bank of America: Reiterates "Buy" Rating for NIO, Lowers Target Price by 8% to HKD 116

Based on the latest closing price of HKD 82, this price implies a 41% upside potential!

The bank stated that NIO's second-quarter sales decreased by 2% YoY to CNY 8.8 billion, with a gross margin of 6.2%, down 10.5 percentage points YoY but up 1.1 percentage points QoQ. The QoQ improvement was mainly due to reduced promotional discounts for the 2022 versions of ES8, ES6, and EC6. The overall gross margin was 1%, down 12 percentage points YoY and 0.5 percentage points QoQ.

Operating expenses as a percentage of sales increased by 20.8 percentage points QoQ to 70.2%, mainly due to higher expenses in areas such as employees, sales promotion, and research and development. The net loss was CNY 6.1 billion, exceeding the bank's expected loss of CNY 5.3 billion.

The company guided for third-quarter deliveries of 55,000 to 57,000 vehicles, up 74% YoY and 134% QoQ, which was below market expectations. The bank lowered its sales volume forecasts for the company for the three-year period from this year to 2025 by 3%, 5%, and 7% respectively, expecting the losses to expand during this period.

Citi: Maintains "Buy" Rating for Xiaomi, Raises Target Price by 5% to HKD 15.7

Based on the latest closing price of HKD 12.46, this price implies a 26% upside potential!

The bank stated that Xiaomi's second-quarter overall performance exceeded expectations. Revenue increased by 13% QoQ to CNY 67.4 billion, roughly in line with expectations, and the gross margin reached a record high of 21%. Operating expenses were also better than expected.

The bank expects the company's third-quarter business to show growth on a quarterly basis, driven by smartphone sales, with a gross margin likely to remain above 19%. Electric vehicle expenses are expected to increase QoQ but remain manageable. The bank raised its adjusted earnings per share forecasts for Xiaomi for the years 2023 to 2025 by 27%, 18%, and 10% respectively, to reflect higher gross margins and lower operating expenses.

The bank stated that the release of Xiaomi 14 and electric vehicles will be positive catalysts for the company.

Goldman Sachs: Maintains "Buy" Rating for BYD, Lowers Target Price to HKD 321

Based on the latest closing price of HKD 244.8, this price implies a 31% upside potential!

CICC: Maintains "Outperform" Rating for SenseTime, Lowers Target Price by 53.5% to HKD 2

Based on the latest closing price of HKD 1.51, this price implies a 32% upside potential! The bank pointed out that Sensetime's total revenue in the first half of the year was 1.433 billion yuan, a year-on-year increase of 1.3%; the net loss attributable to the parent company was 3.12 billion yuan, and the adjusted net loss attributable to the parent company was 2.374 billion yuan, narrowing by 1% and 5.6% respectively compared to the same period last year. Due to the pressure from smart cities and commercial sectors, the performance fell short of expectations.

Considering that the company's smart city business has weaker receivables than expected, the bank has lowered Sensetime's revenue forecast for 2023 and 2024 by 16.9% and 28.2% respectively, to 4.26 billion yuan and 4.86 billion yuan. Taking into account the improvement in business profitability under the empowerment of AIGC, the adjusted net loss attributable to the parent company for 2023 and 2024 is expected to narrow by 8.7% and 7.8% respectively, to 1.92 billion yuan and 1.18 billion yuan.

Jefferies: Initiates "Buy" rating on SenseTime, with a target price of $250

Based on the latest closing price of $211.96, this price implies an upside potential of 18%!