Deutsche Bank is optimistic on NIO ES9 demand, maintains Buy and raises target price to HK$80

Overview

This is a company research and forecast revision report by Deutsche Bank on NIO (9866.HK). The core conclusion is that pre-sale demand for the ES9 executive flagship electric SUV exceeded expectations, while also improving showroom traffic and demand for high-priced models such as the ES8, leading analysts to raise expectations for 2026 sales, revenue, and loss improvement, while maintaining a Buy rating.

Core views

The report believes NIO's improvement in 2026 will come from three main drivers: first, the ES9 as a high-end flagship SUV will generate stronger order flow and a better product mix; second, model refreshes for the ES8, ES6, EC6, ET5, and ET5E will release pent-up demand, with overall orders and deliveries in April likely to rise significantly; third, larger sales volume, fixed-cost dilution, lower procurement costs, and expense ratio control should help drive a return to full-year profitability in 2026 or at least a significant reduction in losses.

Analysis framework

The report combines dealer visits, third-party order data, company delivery announcements, management guidance, and a DCF valuation model to update NIO's 2026-2028 sales, revenue, margins, cash flow, and valuation forecasts. Key variables include ES9 monthly sales ramp-up, April order flow, vehicle gross margin, ONVO losses, WACC, and terminal growth rate.

Methodology notes

• Valuation methodsDCF

  Five-year cash flow forecast and terminal value discounting

  The target price is derived from DCF analysis. The report uses a five-year forecast period to capture the maturation of electrification and intelligentization trends in China's auto industry. Key assumptions include 8.5% WACC, 4.2% cost of debt, 3.5% risk-free rate, 6.0% market risk premium, beta of 1.0, 15% tax rate, 80% equity weighting, and 0.5% terminal growth rate.

• Operating forecastOrder and sales forecasting

  Dealer visits and order flow tracking

  Based on dealer feedback and Thinkercar weekly order data, the report assesses April order flow, ES9 pre-sale demand, ES8 order growth, and the room for upward revision in the 2026 sales forecast.

• Earnings forecastMargin and expense ratio breakdown

  Product mix, costs, and operating expenses jointly drive earnings improvement

  The report incorporates vehicle gross margin, product mix improvement, fixed-cost dilution, raw material and battery price pressure, cash promotions, and R&D and SG&A expense ratios into its earnings forecast.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• NIO 9866.HK

  Core covered name

  Strengths

  Strong ES9 pre-sales, improving ES8 orders, growth in April order flow, product mix shifting toward the higher-margin NIO brand, and a significant narrowing of the 2026 loss forecast.

  Weaknesses

  The company is still loss-making, and delivery of profitability depends on sales ramp-up, margin improvement, and expense control.

  Comparison

  The report places NIO within China's premium intelligent EV and auto technology space, arguing that its valuation is better measured by DCF rather than single-period earnings multiples.

  Risks

  Flagship model demand below expectations, larger losses from the ONVO mass-market brand, rising raw material and battery prices, and greater cash promotions.

• ES9 SUV

  Main growth catalyst

  Strengths

  Large dimensions, prominent flagship design language, better-than-expected pre-sale orders, and expected average monthly sales of about 5,000 units in the second half of 2026.

  Weaknesses

  It has not yet been formally delivered, orders are cancellable, and actual conversion rates and mass-production ramp-up still need to be verified.

  Comparison

  The report believes the ES9 is driving showroom traffic and may redirect some potential customers to the higher-value ES8.

  Risks

  Delivery delays, production ramp-up difficulties, and higher-than-expected order cancellation rates.

• ES8 SUV

  Beneficiary model

  Strengths

  April orders are expected to increase 20%-30% month-on-month, the 100,000th delivery has been achieved, and April monthly deliveries may reach 15,000 units.

  Weaknesses

  Demand sustainability still needs to be observed, and weaker flagship SUV demand would affect the overall forecast.

  Comparison

  The ES8 is benefiting from showroom traffic brought by the ES9 launch and is an important contributor to April delivery growth.

  Risks

  Intensifying competition in premium SUVs and demand below expectations.

• ONVO brand

  Sub-brand with both growth and risk

  Strengths

  Refreshes of the ONVO L80 and L60 are expected to contribute to sales scale and fixed-cost dilution.

  Weaknesses

  The mass-market brand may bring larger operating losses.

  Comparison

  Compared with the premium NIO brand, ONVO is positioned more toward the mass market, with more uncertain profitability and return on investment.

  Risks

  Greater-than-expected ONVO losses are one of the key downside risks listed in the report.

Key data

• RatingBuyDeutsche Bank maintains a Buy rating.
• Current share priceHKD 50.90As of April 23, 2026.
• Target priceHKD 80.00Raised from HKD 76.00 to HKD 80.00.
• Implied upsideApproximately 57.2%Estimated based on the target price of HKD 80.00 and the current price of HKD 50.90.
• ES9 pre-sale ordersApproximately 40,000 unitsDealer visits indicate these are cancellable orders nationwide, with a deposit of RMB 5,000.
• Expected monthly sales of ES9Approximately 5,000 unitsExpected after capacity is fully ramped up in the second half of 2026.
• 2026 sales forecast420,000 unitsRaised 5% from the previous 400,000 units.
• April new order flowApproximately 42,000 unitsThe report estimates a 17% month-on-month increase.
• April group delivery forecast34,000 unitsExpected to grow 42% year-on-year, including the NIO, ONVO, and Firefly brands.
• 2026 net loss forecastRMB 3.665bnNarrowed by 49.6% versus the previous forecast.
• 2026 revenue forecastRMB 124.823bnThe key revision table shows an increase from RMB 113.270bn to RMB 124.823bn.
• Valuation multiple1.4x 2026E EV/SalesImplied multiple from the DCF target price.

Impact & implications

If ES9 orders are fulfilled and deliveries proceed smoothly, NIO may regain growth momentum in the premium pure-electric SUV market, while improving product mix and gross margin through higher-priced models. The target price increase reflects potential market re-rating of its 2026 sales ramp-up, loss reduction, and path to profitability. However, the investment case still depends heavily on order conversion, production ramp-up, cost pressure, and ONVO loss control.

Risks

• Demand for flagship models such as the ES8 and ES9 may be weaker than expected, causing sales and gross margin forecasts to miss.
• Operating losses from the ONVO mass-market brand may be greater than expected, dragging on group earnings improvement.
• Rising prices for memory chips, raw materials, and batteries, as well as increased cash promotions, may offset the gross margin improvement from a better product mix.
• ES9 pre-sale orders are cancellable, and actual delivery conversion rates are uncertain.
• DCF valuation is sensitive to assumptions for WACC, terminal growth rate, sales, and margins, so the target price is subject to model uncertainty.
• Deutsche Bank and its affiliates have disclosed investment banking, market-making, or other service relationships with the company, and investors should be aware of potential conflicts of interest.

What to watch

• The actual order conversion rate and monthly sales ramp-up speed after ES9 deliveries begin at the end of May 2026.
• Whether NIO Group deliveries in April and subsequent months approach the report's forecast of 34,000 units.
• Whether ES8 order growth is sustainable and whether showroom traffic driven by the ES9 launch can convert into sales across multiple models.
• Whether vehicle gross margin in the first quarter of 2026 remains close to the level of the fourth quarter of 2025.
• The scale of ONVO brand losses and the contribution of the L80 and L60 models to sales and margins.
• The impact of changes in raw material, battery, and memory chip prices on vehicle gross margin.
• Whether R&D and SG&A expense ratios can remain under disciplined control as expected in the report.