Citi opens ‘positive catalyst watch’ on Nio

Citi opened a “30-day positive catalyst watch” on shares of Nio (NIO) while keeping a Buy rating on the shares with a $7 price target following the Q2 report. The firm expects product mix improvement with higher selling prices and better scale effect in Q3. It forecasts no refinancing plan in the short-term as it thinks Nio’s working capital in Q3 and Q4 will keep improving as revenue grows sequentially with volume and price hikes. Nio is currently trading at a 30%-40% discount versus XPeng (XPEV), which opens up an arbitrage opportunity for Nio, the analyst tells investors in a research note.