NIO's revenue achieved positive growth, but financial data still indicates accelerating deterioration.
On March 5th, NIO (09886:HK; NIO:NYSE) released its unaudited financial performance for the fourth quarter and the full year ending December 31, 2023.
The financial report reveals that in the fourth quarter of 2023, NIO achieved a revenue of CNY 17.1 billion, a 6.5% year-on-year growth. The gross profit margin for the vehicle segment reached 11.9%, maintaining a double-digit level for two consecutive quarters, with research and development investment reaching CNY 3.97 billion for five consecutive quarters.
By the end of the fourth quarter, NIO's cash reserves had surged to CNY 57.3 billion, a substantial increase of CNY 12.1 billion compared to the previous quarter. This increase is attributed to actions such as strategic investments totaling USD 33 billion from the Abu Dhabi investment firm CYVN in the latter half of last year.
For the full year of 2023, NIO's total revenue reached a record high of CNY 55.62 billion, marking a 12.9% year-on-year growth. The annual research and development investment amounted to CNY 13.43 billion, surpassing CNY one hundred billion for two consecutive years.
Despite achieving year-on-year positive growth in sales volume and operating income, NIO's financial data for 2023 did not improve and showed signs of accelerating deterioration.
The net loss for 2023 amounted to CNY 20.7198 billion, a 43.5% year-on-year increase. Notably, NIO's gross profit margin for 2023 was 9.5%, a decrease of 4.2 percentage points from 13.7% in 2022, with a comprehensive gross profit margin of 5.5%, down by approximately 5 percentage points from 10.4% in 2022. Over the past six years, NIO's cumulative losses have exceeded 86 billion RMB.
Furthermore, as of December 31, 2023, NIO's balance of cash and cash equivalents, restricted cash, short-term investments, and long-term fixed deposits amounted to CNY 57.3 billion, while current liabilities reached CNY 57.798 billion, increasing by CNY 11.946 billion compared to the previous year. Total liabilities amounted to CNY 88.787 billion, increasing by CNY 19.17 billion compared to the previous year.
The scale of sales volume remains NIO's biggest bottleneck. However, NIO's Chairman and CEO, William Li, emphasized during the financial report meeting that the NIO brand places greater emphasis on gross profit margin and will not engage in price wars to achieve sales volume.
"NIO will face competition from companies such as Tesla, as well as some new startups and private enterprises. This kind of competition is good for consumers, but it will indeed pose some challenges for the company. Ultimately, the winners will be companies with stronger overall capabilities," Li said.
An insider from the automotive planning department stated that NIO's sales exceeded 20,000 vehicles in July last year, largely due to the overall price adjustment in June. However, with the intensification of the domestic car market, the emergence of models such as the NIO 007 and NIO S7 has led to a decline in the cost-effectiveness and competitiveness of NIO products.
Additionally, Li stated that in 2024, the NIO brand will focus on improving efficiency and expanding into lower-tier markets, promoting sales through the deployment of charging and energy replenishment facilities in these areas. Data shows that first-tier cities, represented by the Yangtze River Delta, contributed the majority of NIO's sales, accounting for over 70% of sales in first-tier cities.
Regarding overseas markets, NIO, which began its overseas expansion in 2022, will continue to proceed cautiously. Li stated that the company will streamline operations in the five European countries it has entered and will expand into the United Arab Emirates. With the introduction of second and third-tier brands, NIO will cover a wider price range, thereby targeting a larger market. Additionally, NIO currently adopts a fully direct sales model in overseas markets. In the future, NIO will tailor its approach to overseas regional markets' characteristics, including utilizing more efficient investment return methods such as cooperation with local companies.
At the time of publication, NIO's Hong Kong-listed shares were priced at HKD 44.4 per share, with a total market value of HKD 91.75 billion; its US-listed shares were priced at USD 5.48 per share, with a total market value of USD 11.401 billion.