Bottom-up analysis of Nio (NYSE: NIO)

 Bottom-up approach: 

Nio was one of the best performing Chinese companies in the US stock exchange, with stock gains of above 1100% (CNBC), with its deliveries increasing to more than two fold at 43,728 vehicles. Further, Nio is expected to expand globally, first into Europe. 

For more information on number of Nio vehicles sold, kindly refer to https://carsalesbase.com/china-nio/, or https://ir.nio.com/news-events/news-releases/news-release-details/nio-inc-provides-december-fourth-quarter-and-full.

Recently in January, Nio announced that its new sedan, the ET7, would be able to hit the 1,000km (621 miles) range mark using their new 150kWh battery - the first EV to be able to do so. 

Things to note: 

- values were taken from Capital IQ, Ycharts, PRNewswire, Statista and MarketWatch

- Key assumptions were that Nio follows at 2-stage growth, first stage until 2026. 2nd stage growth rate I assumed it to follow the automobile industry now at 4.8%. My professor has given the feedback that I could assume a higher growth rate instead, with Nio's popularity in China

- Certain indicators were taken at face value, such as the 5-year beta. It would perhaps be prudent to average the 5-year beta from multiple sources like Bloomberg and Yahoo! Finance

- The relative valuation method could be another way to value Nio, and sensitivity analysis could be conducted to see what FCF would be like with different growth rates

Overall it was a fun exercise, albeit a rushed one. Looking forward to the post-market earnings release on Monday!