Market news丨NIO has a single-day increase of over 22%, why did the new forces in the US stock market rise against the trend?

On Wednesday, the three major U.S. stock indexes closed down across the board, but new car-making forces bucked the market and walked out of an upward curve. At the opening of the market on Wednesday, Weilai opened high and went high, hitting a high of $26.96 during the session, a new high since its listing. It closed up 22.57% and went up 4.3% after the market. In addition, Xiaopeng Motors (XPEV.US) rose more than 12%, and Ideal Motors (LI.US) rose nearly 7%.  

It is worth noting that entering the second half of 2020, Weilai's stock price has fluctuated and increased, and has so far increased by 565.8%, which has changed the previous decline. Affected by negative news, NIO's stock price fell to about $1 last year, almost reduced to a "penny stock", and CEO Li Bin was ridiculed as "the worst person."


The turning point occurred at the end of April this year. After NIO received a strategic investment of 7 billion yuan, it raised more than US$2 billion through two additional issuances. The delivery volume also provided strong support for Weilai's stock price rise. In the past seven months, Weilai's delivery volume has maintained a continuous year-on-year growth. The cumulative delivery of 26,375 vehicles in the first three quarters has exceeded the entire year of last year.

NIO, who has emerged from the "mercury retrograde" period, has recently gained support from many investment banks. Citi, JPMorgan Chase recently gave Weilai a target price substantially higher than its current stock price.

Citi analyst Jeff Chung said that Weilai’s accumulated backlog has increased by 100% from the end of September to now to 7,000 vehicles, which will greatly increase its profit margins and raise Weilai’s target price from 18.1 US dollars to 33.2 US dollars. JPMorgan Chase analyst Nick Lai gave Weilai an "overweight" rating in a research report on Wednesday, and sharply raised the target price to $40, an increase of 185.7% from the target price given in June.


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