Nio reports generally solid first-quarter result and provided a better-than-expected second-quarter volume outlook, said Deutsche Bank.

Nio (NYSE: NIO) announced its first-quarter 2024 earnings today, and as usual, Deutsche Bank analyst Edison Yu's team provided their first impressions.

Here's the research note the team sent to investors just as Nio's earnings call began.

1Q24 Earnings First Look

NIO reported generally solid 1Q results and provided a better-than-expected 2Q volume outlook.

Deliveries for the first quarter were already reported at 30,053 units, leading to revenue of RMB 9.9bn - lower than DBe/consensus of RMB 10.2/10.8bn due to lower ASP (hurt by increased promotional activity during product transition and changes in mix).

However, gross margin of 4.9% was above our 2.8% forecast (consensus 4.7%), driven by higher Other margin (-18.4% vs. our -30.5% - best performance since 3Q21) while Vehicle margin was in line (9.2% vs. our 9.1%).

Opex of RMB 5.86bn was slightly lower than our expectation of RMB 5.95bn, on lower R&D.

All together, adjusted EPS of (RMB 2.39) came in slightly lower than our model (DBe/consensus at -2.32/-2.27).

Management provided a better-than-expected volume outlook for 2Q24, calling for 54,000-56,000 deliveries (RMB 16.6-17.1bn in revenue).

This easily beat our ingoing model for 47,500, but buy side expectations have clearly been rising recently post the May deliveries and order intake trends.

The outlook implies June will likely fall back from May's 20,544 units to ~18,800 units at the mid-point.

The implied ASP is roughly flat QoQ, suggesting aggressive promotional activity in 2Q.

On the earnings call, we will look for further insight on the volume/margin trajectory and ONVO mass market brand.

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