NIO Inc Revs Up!
Shares Surge Towards A 15-Month High!

Stock Options Made Easy “Mentorship Program” Members Make
125% Potential Profit!

by Ian Harvey
June 19, 2020


China-based electric vehicle maker Nio Inc shares rose to close yesterday towards a 15-month high. The stock was the most actively traded on the NYSE. Time to buy?

And, Stock Options Made Easy Mentorship Program Members were well-positioned to benefit; and made 125% potential profit based on a CALL OPTIONS trade.

Nio Inc – ADR (NYSE: NIO) Calls

Nio stock price has increased by 116.77% in the past month, and in the past year, by 173.34%. Nio's stock was on track for the highest close since March 2019.

Ride-sharing company Lyft Inc. (LYFT) said on Wednesday that every vehicle on its platform will be electric, or zero-emissions, by 2030.

Compared to the aggregate P/E ratio of the 11.39 in the Auto Manufacturers industry, NIO Inc. has a lower P/E ratio of 0.0, which could possibly mean that the stock is undervalued.

On June 2, the stock added about 20% following a Goldman Sachs upgrade from Neutral to Buy with a $6.40 price target.

Yesterday saw Nio Inc close at $7.18, after hitting a high of $7.36.

As at the time of writing, Nio Inc had added another 1.67% pre-market.

As well, the stock opened Tuesday's session at $7.43, above BofA Securities' recently revised price target of $7.30 and rose to a high of $7.44 amid the news it has closed its 72-million-ADS offering at $5.95 per share, raising $428.4 million.

Is it time to get in on the action?


Mentorship Program  Members executed a call options trade on NIO Inc on Tuesday, June 09, 2020, at a cost of $0.75; and the sell value of the option hit $1.71 yesterday – a potential profit of 125%.

The recommended options trade for “Mentorship Program” Members.....

 ** OPTION TRADE: Buy NIO 2020 AUG 21 7.000 CALL at approximately $0.85. (Max. $1.00). Opening price was $0.76.

The Recommended Trade…..

“Shanghai-based EV manufacturer Nio Inc – ADR (NYSE: NIO) looks as if it is seeing a turning point. In Q1 2020, NIO delivered a total number of 3,838 ES8 and ES6 as the country was heavily impacted by COVID-19.

Nio was trading at about $2.00 at the start of the year. Based on the data, there should be plenty of upside left for Nio stock. In fact, it’s entirely possible that the shares could double again from here. After all, this was a $10 stock a year and a half ago.

Nio stock has worked its way back up to the 52-week high of about $6. Besides, there’s a glimmer of hope on the horizon for the Chinese automotive market, and hence for Nio.

As Baird analyst David Leiker points out, automotive production in China cratered by 44% during this year’s first quarter. There was a bounce-back in April, however, as nationwide production was flat for that month on a year-over-year basis.

And China is still the world’s largest electric-car market, so Nio’s got a big, albeit weather-beaten, playground to play in.

After the COVID-19 induced slackness in January and February, the company began taking a turn for the better in March, reporting 116.8% month-over-month increase in deliveries to 1,533 vehicles. The momentum continued into April, as Nio delivered 3,155 vehicles in April.

"We remain fully committed to the vision of building the best user enterprise by offering high-quality premium smart electric vehicles in the years to come," Li said.

"We expect to achieve the delivery goal for the second quarter 2020, while continuously improving gross margin and narrowing operating loss," CFO Steven Feng said in a statement.

In its first-quarter earnings report released May 28, Nio guided to second-quarter deliveries of 9,500-10,000 vehicles.

…..


Why The Positive Take……

Nio's strong gains are predicated on improving fundamentals at the company, with order growth and cost discipline propping up the top- and bottom-line.

In late May, the company reported better-than-expected bottom-line performance despite a top-line miss, with revenue impacted primarily by the COVID-19 pandemic.

The company has picked up since then. After bottoming in February, orders have started to rebound. Nio is now projecting record deliveries of 9,500-10,000 vehicles in the second quarter.

Industry fundamentals have also bottomed. The Chinese EV market is slowly and steadily improving in the wake of the coronavirus — and the softness induced by the government's cutback in EV subsidies.

NIO said that it successfully completed its offering of 72 million new American depositary shares at a price of $5.95 per share. The banks underwriting the offering, Morgan Stanley, Credit Suisse, and China International Capital Corporation, have a 30-day option to purchase up to 10.8 million more shares.

Share Offering.....

NIO said that it successfully completed its offering of 72 million new American depositary shares at a price of $5.95 per share. The banks underwriting the offering, Morgan Stanley, Credit Suisse, and China International Capital Corporation, have a 30-day option to purchase up to 10.8 million more shares.

NIO said that it will use the proceeds of the offering, about $428 million minus the bankers' fees, to fund a cash investment that it agreed to make in its Chinese business (a subsidiary called "NIO China") as a condition of a financing deal with economic-development authorities in China's Anhui province.

Those authorities, in Anhui and in the province's capital city of Hefei, agreed in April to invest just under $1 billion in exchange for a 24.1% stake in NIO China. 


Moving Forward.....

As part of the financing deal in April, NIO agreed to move its headquarters and engineering teams to Hefei, one of China's auto-industry hubs. The city's government is hoping that NIO's presence will spur investment in suppliers and other future-mobility ventures in the region. 

"We expect NIO China will use the cash investments for research and development of products, services and technology, development of our manufacturing facilities and roll-out of our supply chain, operation and development of our sales and service network and general business support purpose[s]," the company said in a statement last week.


Are You Ready To Get On-board With A Nio Inc Options Trade?

Will Nio Inc Shares Continue To Rise?

What Other Trades Are We Anticipating?

Do You Wish To Be Part Of This Action?

Join us here at Stock Options Made Easy, and find out our trades moving forward.


An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.

It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!

Best of Trading,
Ian Harvey
Director of Stock Options Made Easy


”Success is simple. Do what's right, the right way, at the right time.”

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Options traders are not successful because they win.
Options traders win because they are successful.

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