Guo Ji Jin Rong Bao·2025-10-17 15:34Core Viewpoint - The lawsuit filed by the Government of Singapore Investment Corporation (GIC) against NIO highlights allegations of inflated revenue and profits through a partnership with Wuhan Weinan Battery Asset Co., leading to investor losses [2][4]. Group 1: Lawsuit Details - GIC accuses NIO of recognizing over $600 million in battery leasing revenue without disclosing substantial control over Wuhan Weinan, resulting in significant losses during the investment period from August 2020 to July 2022 [4]. - The lawsuit's core allegations align closely with a short-selling report by Grizzly Research in June 2022, focusing on related party transactions involving Wuhan Weinan [4][5]. - A U.S. judge has ordered a pause in the proceedings of GIC's lawsuit due to ongoing collective litigation, causing fluctuations in NIO's stock price [4]. Group 2: Accounting Practices - The lawsuit raises concerns about NIO's accounting practices, specifically the recognition of long-term leasing income as a one-time revenue, which allegedly violates U.S. accounting standards [5]. - GIC claims that if the rental income were recognized over five years, the revenue growth would appear significantly less dramatic, contrasting with the reported increase from under 3 billion to 6.6 billion in Q4 2020 [5]. Group 3: NIO's Defense - NIO defends its revenue recognition based on the principle of "control transfer," asserting that ownership and rental income rights were transferred to Wuhan Weinan upon battery sale, meeting revenue recognition criteria under ASC 606 [6]. - The company holds a 19.8% stake in Wuhan Weinan, and there is no evidence of control agreements, which raises questions about the consolidation of financial statements [6]. - Major financial institutions, including Deutsche Bank and Morgan Stanley, have publicly disagreed with the conclusions of the Grizzly report, suggesting a misunderstanding of NIO's Battery as a Service (BaaS) model [6]. Group 4: Recent Financial Performance - NIO's recent financial results show revenue growth and a reduction in net losses, with Q2 2025 revenue at 19.01 billion, a 9% year-over-year increase, and a net loss of 5.14 billion, narrowing by 0.29% [8]. - For the first half of the year, total revenue reached 31.043 billion, up 13.49% year-over-year, with a net loss of 12.032 billion, a 15.87% reduction compared to the previous year [8].