Guotai Haitong has released a research report initiating coverage on NIO-SW (09866) with an "Add" rating. The brokerage stated that the company achieved its first quarterly profit in Q4 2025, driven by a surge in vehicle deliveries and an increased proportion of higher-priced models. With the product matrix expected to continue expanding through 2026, the firm forecasts NIO's revenue for 2025/2026/2027 to reach RMB 870 billion, RMB 1.306 trillion, and RMB 1.614 trillion, respectively.

Using the PS valuation method and referencing comparable companies, Guotai Haitong assigned a 0.85x PS multiple for 2026, corresponding to a target price of HK$50.59 (converted at an exchange rate of HK$1 = RMB 0.89).

Key points from the report include:

**Record Deliveries and First Quarterly Profit in Q4 2025** According to the China Passenger Car Association, NIO delivered 125,000 vehicles in Q4 2025, a 72% year-on-year increase, setting a new quarterly record. Deliveries for the NIO, Ledao, and Firefly brands reached 67,000, 38,000, and 19,000 units, respectively, all hitting historic highs. The newly launched premium model, the ES8, performed strongly, accounting for 32% of total Q4 sales and significantly boosting overall profitability. Adjusted operating profit (Non-GAAP) for the quarter is estimated at RMB 700 million to RMB 1.2 billion, with GAAP operating profit ranging between RMB 200 million and RMB 700 million, marking the company’s first quarterly profit.

In terms of cost reduction and efficiency improvements, NIO’s CEO William Li highlighted the important role of the Core Business Unit (CBU) mechanism and emphasized its continued implementation. The brokerage believes that with sustained sales growth, a higher mix of premium models, and further cost-saving measures, NIO’s profitability is expected to improve further.

**Expanding and Diversifying Product Lineup** Since 2025, the company has launched several new models, including the Firefly, the new ES8, and the Ledao L90, strengthening its product portfolio. In December 2025, the new ES8 sold 22,000 units, leading sales in the large SUV, three-row SUV, and premium vehicle (above RMB 400,000) segments. The report anticipates that NIO will introduce additional models such as the ES9, ES7, and Ledao L80 in 2026, further enriching its product offerings and enhancing market competitiveness.

**Advancing In-House Intelligent Driving Technology** According to NIO’s 2025 Full-Stack Technology Annual Report, the company has fully implemented its self-developed technology system, which includes autonomous driving chips, a vehicle-wide operating system, and world model algorithms. Guotai Haitong expects NIO’s investments in intelligent driving to begin yielding returns, potentially driving improvements in both product appeal and sales performance.