90% surge in 60 days! What happened to Nio?

In the past 60 days, Nio's stock price has surged over 90% from its low, far outperforming the Hang Seng Index's 9% increase. What are the favorable factors behind this?

On August 26, according to news from the Chasing Wind Trading Platform, Morgan Stanley stated in its latest research report that Nio's stock price had previously reached the target price of HKD 50.7 (USD 6.5), and its recent surge is mainly driven by four factors:

Strong growth in ES8 model bookings, positive capital inflow, significant improvement in market sentiment, and the self-reinforcing effect of rising stock prices.

The report pointed out that Morgan Stanley analysts noticed a significant decrease in client inquiries regarding Nio's fundamental demand and execution risks, with more focus on the upcoming L60 and L80 facelift models.

Morgan Stanley predicts that Nio's net revenue is expected to reach RMB 101.244 billion in 2025, grow to RMB 139.323 billion in 2026, and further climb to RMB 175.339 billion in 2027, with a forecast to achieve net profit breakeven in 2028.

Morgan Stanley maintains an "Overweight" rating on Nio, with a target price of USD 6.5, indicating a 3% upside from the current closing price of USD 6.34.

ES8 Pre-orders Booming

Morgan Stanley's research shows that the pre-order performance for the Nio ES8 model has exceeded expectations. As of last weekend, the pre-orders for the ES8 (which requires a refundable deposit of RMB 5,000) may have surpassed 30,000 units, and the number is still growing.

Although actual demand still needs to be assessed based on order conversion rates, the positive feedback reinforces market expectations that the ES8 could be as popular as the L90 last month, providing strong support for Nio Group's goal of achieving monthly sales of 40,000 to 50,000 units starting in October.

Positive Capital Inflow

In the past two days, the trading volume of Nio's stock has exceeded USD 2.5 billion, equivalent to the cumulative trading volume of the previous two weeks. This concentrated capital inflow indicates a significant increase in attention from institutional and individual investors towards Nio, providing a solid liquidity foundation for the continued rise in stock prices.

Significant Improvement in Market Sentiment

Morgan Stanley noted an important change: client inquiries regarding Nio's fundamental demand and execution risks have sharply decreased, replaced by interest in the upcoming L60 and L80 facelift models (both scheduled for release early next year).

The report states that this shift in inquiry content reflects a change in market sentiment from skepticism to anticipation, with investors beginning to shift their focus from risks to growth opportunities.

Self-Reinforcing Mechanism of Rising Stock Prices

Morgan Stanley stated that investors generally believe that Nio's stock performance is highly correlated with the capital market's willingness to provide financing for its operations and strategic development.

The report pointed out that the rise in stock prices enhances confidence in the capital market, thereby improving Nio's financing capabilities, which directly relates to the company's operational value framework and its ability to respond to the accelerated reshuffling of the automotive industry. This positive feedback loop is driving further increases in stock prices