NIO Inc.

NIO Details

September 2020 Quarter Highlights: NIO Inc. (NYSE: NIO) is a china-based automobile company mainly involved in the designing, manufacturing, and selling of smart and connected premium electric vehicles (EV). As of 15 October 2020, the company’s market capitalisation stood at ~$34.32 billion. During the September 2020 quarter, the company delivered 12,206 vehicles, up 154.3% on the previous corresponding period (pcp). In the September month alone, the company delivered 4,708 vehicles, up 133.2% year-over-year. In the late September 2020, the company commenced deliveries of the EC6, a 5-seater premium electric coupe SUV. For the June 2020 quarter, the company reported vehicle sales of RMB3,486.1 million, up 146.5% on pcp. Further, the company reported total revenue of RMB3,718.9 million, up 146.5% on pcp. 

Q2FY20 Results (Source: Company Reports)

Subscribing Additional Registered Capital in NIO China: On 25^th September 2020, the company entered into a definitive agreement to subscribe for newly increased registered capital of NIO (Anhui) Holding Co., Ltd at a subscription price of US$600 million. Following the completion of this transaction, the company will hold around 86.5% controlling equity interests in NIO China. On 2^nd September 2020, the company announced that it has completed the offering of 101,775,000 American depositary shares. NIO intends to use the portion of the proceeds to pay for the Capital Subscription.

What to Expect: Looking ahead, the company intends to use the remaining proceeds from its offering of American depositary share for research and development in autonomous driving technologies, global market development and general corporate purposes. The company is focused on improving its operating efficiency while investing in the technologies and services to provide its users with the best products and experience in the future.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

EV/Sales Multiple Based Valuation (Source: Refinitiv, Thomson Reuters)

Note: All the forecasted figures are taken from Thomson Reuters, NTM: Next Twelve Months

Stock Recommendation: Over the last six months, the stock of NIO has provided a whopping return of 763.69%, and in the last three months, the stock was up by 116.92%. On 15^th October, the stock touched its new 52-weeks high level of $29.23. On the technical analysis front, the stock has a support level of ~$21.17 and a resistance level of ~$29.21.  We have valued the EV/Sales multiple based illustrative relative valuation method and arrived at a target price with a correction of high single digit (in % terms). For the purpose, we have taken peers like Tesla Inc (NASDAQ: TSLA), Li Auto Inc. (NASDAQ: LI), NIU Technologies (NASDAQ: NIU), etc. Considering the substantial rise in the stock price over the last six months, current trading levels and valuations, we suggest investors to wait for better entry levels and hence, give an “Expensive” rating on the stock at the closing price of $28.07, up by 5.92% on 15 October 2020.

NIO Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Thermo Fisher Scientific Inc.

TMO Details

Announces a New Facility in Singapore: Thermo Fisher Scientific Inc. (NYSE: TMO) is a global leader in serving science mainly involved in delivering an unrivaled combination of innovative technologies, purchasing convenience and pharmaceutical services through its industry-leading brand. As of 15 October 2020, the company’s market capitalisation stood at $183.7 billion. On 14 October 2020, the company announced its plans to develop two new sterile filling lines in Singapore to expand sterile filling capacity for therapies and vaccines. Along with the support of the Singapore Economic Development Board (EDB), the company will a develop a US$130 million facility which will manufacture pharmaceutical products to meet demand in the region and respond effectively to future health emergencies. From 2022 onwards, the facility is expected to manufacture up to 30 million sterile doses per month and employ more than 300 people.

Expands COVID-19 Test Portfolio: On 12^th October 2020, the company expanded its COVID-19 test portfolio by introducing two new SARS-CoV-2 antibody tests - the Thermo Scientific OmniPATH COVID-19 Total Antibody ELISA test, and the Thermo Scientific EliA SARS-CoV-2-Sp1 IgG test. Both of are designed to meet the need for open ELISA and automated workflows. 

June 2020 Quarter Highlights: For the June 2020 quarter, the company reported total revenue of $6.92 billion, up 10% on pcp. Notably, the company’s Life Sciences Solutions Segment reported the revenue of $2.60 billion in June quarter, compared with revenue of $1.71 billion Q2FY19. One of the key milestones of June quarter, was the establishment of strategic partnership with CSL Limited to provide entire portfolio of pharma services and operate their new biologics facility in Lengnau, Switzerland. The company’s GAAP diluted earnings per share (EPS) increased by 5% to $2.90 in June quarter, compared to pcp. At the end of June quarter, the company had cash and cash equivalent of $5.8 billion and long-term obligations of $20.6 billion.

June 2020 Quarter Highlights (Source: Company Reports)

What to expect: The company’s is committed to increase its global pharma services capacity to meet strong customer demand. Further, the company is focused on developing new products and capabilities across our businesses that will position it well for years to come.

Valuation Methodology: P/E Multiple Based Relative Valuation (Illustrative)

P/E Multiple Based Valuation (Source: Refinitiv, Thomson Reuters)

Note: All the forecasted figures are taken from Thomson Reuters, NTM: Next Twelve Months

Stock Recommendation: Over the last six months, the company’s stock has provided a return of 41.27%. The stock of TMO is currently trading close to its 52-weeks high level of $458.33. On the technical analysis front, the stock has a support level of ~$411.64 and a resistance level of ~$472.3.  We have valued the stock using P/E multiple based illustrative relative valuation method and arrived at a target price with a correction of high single digit (in % terms). For the purpose, we have taken peers like Agilent Technologies Inc (NYSE: N), Waters Corp (NYSE: WAT), Bruker Corp (NASDAQ: BRKR) etc. Considering the company’s decent return in the past six months, its current trading level and valuation, we suggest investors to wait for better entry levels and give an “Expensive” rating to the stock at the closing price of $464.56, down by 0.52% on 15 October 2020.

TMO Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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