Core Insights - The domestic passenger car market is experiencing a "cooling" trend, with terminal sales reaching 1.849 million units in July, a month-on-month decline of 13.92%, although there is still a year-on-year growth of 1.7% [1] - From January to July, cumulative sales of domestic passenger cars reached 12.611 million units, reflecting a year-on-year increase of 7.1%, with 265 cities achieving year-on-year growth, indicating a long-term positive market trend [1] Sales Performance - First-tier cities continue to dominate sales rankings, with Beijing, Chengdu, and Shanghai occupying the top three positions in July, selling 56,100, 51,900, and 47,400 units respectively; however, all three cities experienced month-on-month declines of 13.75%, 10.21%, and 9.78% [1] - Chengdu showed resilience with a year-on-year cumulative sales growth of 3.27% from January to July [1] City-Specific Trends - Some cities exhibited significant fluctuations in sales; Xi'an saw a sharp month-on-month decline of 25.09%, while Tianjin experienced a drastic drop of 44.03% [1] - In contrast, Changsha demonstrated strong performance with a month-on-month sales increase of 19.38% [1] - Zhengzhou maintained a stable performance in July, ranking sixth nationally with sales of 38,590 units, reflecting stability in the local automotive consumption market [1]

Investment Rating - The report maintains an investment rating of OVERWEIGHT for the company [1][5]. Core Views - The company reported a revenue of RMB12.0 billion in Q1 2025, reflecting a year-on-year increase of 21% but a quarter-on-quarter decrease of 39%. The attributable net loss was RMB6.9 billion, up 31% year-on-year and down 3% quarter-on-quarter. The revenue slightly missed the company's estimate due to intense competition in the battery electric vehicle (BEV) market [1]. - The report suggests monitoring the sales ramp-ups of new models such as the Onvo L90 and L80 in the second half of 2025, alongside ongoing cost cuts and efficiency gains, which could lead to marginal improvements [1]. - The company delivered 42,000 new vehicles in Q1 2025, a 40% increase year-on-year but a 42% decrease quarter-on-quarter. The gross profit margin (GPM) for the quarter was 7.6%, with the automobile GPM at 10.2%. The decline in automobile GPM quarter-on-quarter is attributed to lower output and rising manufacturing costs [2]. - The Onvo L90 and L80 models are expected to leverage spacious interiors and competitive pricing to capture market share in the RMB200,000-300,000 family-facing BEV segment [3]. - The deployment of the NIO World Model (NWM) has improved safety and user experience, with a 40% improvement in precision for highway and urban scenarios [4]. - The company maintains its 2025/2026/2027 attributable net profit forecasts at RMB-14.5 billion, RMB-7.7 billion, and RMB-1.9 billion respectively, with a target price of USD4.09 [5]. Financial Summary - The company expects revenue growth from RMB55.6 billion in 2023 to RMB149.9 billion in 2027, with a compound annual growth rate (CAGR) of 19.42% [12]. - The net profit attributable to the parent is projected to improve from a loss of RMB21.1 billion in 2023 to a loss of RMB1.9 billion in 2027 [12]. - The gross profit margin is expected to increase significantly over the forecast period, reaching RMB31.8 billion by 2027 [12]. - The company’s market capitalization is approximately USD8.14 billion, with a potential upside of 13% from the current closing price of USD3.63 [8].