Actions of the Chinese manufacturer of electric vehicles NIO (NYSE: NIO) rose sharply on Monday morning as US investors returning from a weekend vacation responded to a solid June sales report released late last week.
At 10:15 a.m. EDT, NIO’s US depository shares were up about 23.5% from Thursday’s closing price.
NIO released its June sales report just before the US vacation weekend, and it was good: June sales were up 179% from a year ago; For the second quarter, sales increased by 191% compared to the same period in 2019.
This gain in sales is impressive in itself. It also shows that NIO fully recovered from the COVID-19 shutdown earlier this year and is now benefiting from the expansion of the sales network that it spent a lot to set up in 2019.
In addition to that, a big investment from economic development authorities in the industrial heart of China has suspended cash concerns for the moment, and it has given NIO enough funds and momentum to build its own factory near its headquarters in the city of Hefei.
In short: a few months ago, NIO faced difficult questions from investors; most of these questions have now been answered.
NIO has not yet set a date for its report on the second quarter results, but this should happen in the second half of August. Auto investors should look forward to it: NIO chief financial officer Steven Feng said last week that the big sales result gives him confidence that the company will be able to reach or beat its gross profit margin target.
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