Affected by this news, NIO US stocks fell more than 7% before the market. To this end, NIO (HK09866, share price HK $66.15, market value HK $117.47 billion) urgently issued a clarification announcement saying, "The company has taken note of media speculation that NIO is considering raising funds from investors." In light of the unusual market activity in the Company's American Depositary shares today, the Company would like to clarify that it does not currently have any reportable financing activities other than the issuance of convertible Senior Notes, which was completed on September 25."
Weilai Announcement
As of the close of September 25 local time, NIO's share price was 8.35 US dollars per share, down 2.11%; As of the close of September 27, NIO's Hong Kong stock price was 65.55 Hong Kong dollars per share, an increase of 2.9%.
In fact, as early as September 19, NIO issued an announcement that the company intends to issue $1 billion of convertible senior bonds. Of this amount, an aggregate principal amount of US $500 million is due in 2029 and an additional aggregate principal amount of US $500 million is due in 2030, subject to market conditions and other factors. The Company intends to grant the initial purchasers of the Notes in the Offering options exercable within 30 days of, and including, the date of issue of the Notes to purchase additional 2029 Notes up to an aggregate principal amount of US $0.75 million and additional 2030 Notes up to an aggregate principal amount of US $0.75 million.
Weilai Announcement
As of September 25, NIO announced the completion of the issuance of $1 billion of convertible senior bonds. "The Company has granted to the initial purchasers of the Notes an option exercitable within 30 days of the date of issue (inclusive) of the Notes to purchase additional 2029 Notes up to an aggregate principal amount of US $0.75 million and additional 2030 Notes up to an aggregate principal amount of US $0.75 million." Nio said.
Prior to this, NIO has begun external financing. On the evening of June 20, NIO announced that it signed a share subscription agreement with CYVN Holdings, an ABU Dhabi investment institution. According to the agreement, CYVN Holdings will make a total strategic investment of approximately $1.1 billion in NIO through a private placement of new shares and the transfer of old shares. "This investment transaction will further strengthen NIO's balance sheet and provide momentum for our ongoing efforts to accelerate business growth, drive technological innovation and build long-term competitiveness." Nio chairman Li Bin has said.
On July 12, NIO announced that it had completed a $738.5 million strategic equity investment from CYVN Holdings. Not only that, in late July, NIO's asset-backed securities were successfully issued on the Shanghai Stock Exchange, with an issuance scale of 859 million yuan and a preferred coupon rate of 2.78%.
Some people believe that the reason for the above rumors is related to the financial pressure faced by WEilai. According to the financial report released by NIO, in the second quarter of this year, NIO's net loss was 6.558 billion yuan, an increase of 119.6%, and the market had expected a net loss of 5.332 billion yuan. As of June 30, 2023, NIO's cash and cash equivalents were RMB13.723 billion, a decrease of RMB6.164 billion from RMB198.87 billion as of December 30, 2022.
NIO earnings
Despite this, NIO still adheres to the high R&D investment pace for project advancement. According to the financial report, in the second quarter of 2023, NIO R & D expenses reached 3.345 billion yuan, exceeding 3 billion yuan for three consecutive quarters, increasing by 55.6% and 8.7% year-on-year and quarter-on-quarter respectively. "Nio is more from the perspective of long-term thinking, using recent research and development investment for long-term gross profit." Li Bin stressed.
According to Li Bin, He Xiaopeng (chairman and CEO of Xiaopeng Automobile) has repeatedly persuaded him not to make so much investment and save money, but he is still insisting on high research and development investment. "Thank you for your concern about NIO, we can manage our own business risks, but in terms of R&D investment we will improve efficiency, at present, the company's R&D investment is basically maintained at a revenue ratio of more than 20% per quarter, and it is expected to maintain an investment of about 3 billion per quarter, which is within the range of what we can afford. It is also a basic guarantee for NIO to participate in the increasingly fierce intelligent electric vehicle competition in the next stage." Li Bin said that NIO is very clear about its business boundaries, and will only focus on research and development, charging infrastructure and service users in the future.
