Nio Share Price Forecast September 2021 – Time to Buy NIO?
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Shares of China-based NIO (NYSE:NIO) are in the red today after closing at $35.05 as of September 28th (19:59 UTC-4). Investors might be wondering whether its too late to grab NIO shares as the Chinese government starts cracking down on this sector. But there are several reasons why Nio can provide an opportunity for risk-tolerant investors.
NIO – Technical Analysis
According to the financial statement of Nio, the market cap is at $60.248 billion with total assets worth $10.14 billion. Revenue for 2020 was at $2.36 billion with a profit margin of -34.51% compared to $1.13 billion in 2019.
Oscillators for Nio such as Relative Strength Index (14)(38.17), Stochastic %K (14, 3, 3)(23.26), Commodity Channel Index (20)(−114.51), Average Directional Index (14)(24.54) and Awesome Oscillator(−2.49) are neutral. Moving averages such as Exponential Moving Average (10)(36.25), Simple Moving Average (10)(36.16) and Exponential Moving Average (20)(37.21) and Simple Moving Average (20)(37.61) are pointing towards selling.
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Recent Developments
Investors have to balance risk from uncertainty when it comes to Nio. Good opportunities for investments may arise for reasons unrelated to either the company in question or its sector. Chinese authorities have recently started to come down hard in various sectors including for-profit education companies and big-tech. On top of that global markets have been shaken by the fear of loan default by a large Chinese real estate company. This turbulence has also affected Nio in a negative way.
NIO shares performed well in early 2021 as its American depository shares reached $60 which represented an almost $100 billion market cap. The company had first begun to solidify its balance sheet in 2020. There are some positive signs that the company is getting ready and it can do wonders if it can absorb more macro risks associated with regulators and potential government intervention. The company renewed a manufacturing agreement with its state-owned partner in May 2021, which will last till 2024 and will double its capacity to 240,000 vehicles.
Nio also has plans to release three new products in 2022 which includes the much talked about ET7 luxury electric sedan. The company recently conducted an extreme heat test on the sedan to check its thermal management system, performance of the powertrain system, and the battery cooling system under extreme heat conditions. Nio plans to launch the ET7 in Norway next year and in Germany by the end of 2022. In addition to this, the company will also release the ET5 sedan which will be positioned below the ET7.
Should You Buy NIO Shares?
Investors of NIO have to consider some facts. Nio is based in China, the largest auto market in the world. Roughly half of all new vehicle sales by 2035 could be powered by alternative energy according to the Society of Automotive Engineers of China. This will result in annual sales of 10 million-plus EVs which is very positive news for Nio. The company looks well on its way to hit an annual run-rate of 150,000 once the semiconductor chip supply issues are resolved.
The company isn’t alone in trying to expand its EV business in the biggest auto market in the world. Its competitors in China are also starting to expand outside of the country. Some of the risks that come with owning Nio shares include competition, political uncertainty, and its status as an as-yet unprofitable company still valued at almost $60 billion. However, more aggressive, long-term investors should buy NIO if they believe in the company’s growth potentials moving forward.
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