# Nio will be a ‘winner’ in EV market, analyst says

Nio’s
NIO,
-1.70%
price target was raised to $46 from $41 and XPeng’s target was boosted to $43 from $27. Wen kept her overweight ratings on both stocks.

“We believe Nio will be a long-term winner in the premium EV space, with ~ 30% market share by 2025,” Wen wrote in a note to clients. “A higher valuation can be justified as Nio is leading the transformation of its business model in China’s smart EV market — from direct sales currently to potential monetization of both ‘B’ and ‘C’ customers through its platform and content offering in the future — similar to the phenomenon we witness in e-commerce business now.”

The stock slipped 0.1% ahead of Monday’s open. The stock has skyrocketed 935.6% year to date through Friday. In comparison, U.S.-based rival Tesla Inc.’s stock
TSLA,
-1.85%
has run up 413.9% this year and the S&P 500 index
SPX,
-0.02%
has gained 8.6%.

XPeng shares advanced 0.1% in premarket trading. The stock, which went public on Aug. 27, has soared 79.6% just this month.

Separately, Wen upgraded Dongfeng Motor Group Co. Ltd.
DNFGY,
+8.31%

489,
+6.84%
to overweight from neutral, saying an upcoming A-share issuance, which will give the Hubei, China-based company funds to invest in new EV brand “Lantu,” will be a near-term catalyst.

Meanwhile, Wen downgraded both Guangdong-based BYD Co.
BYDDY,
-1.33%

1211,
+1.03%
and Hong Kong-based Geely Automobile Holdings Ltd.
GELYY,
-4.52%

175,
+0.71%
to neutral from overweight, citing valuation concerns.

For BYD, Wen said she likes the long-term story transforming toward a top battery maker, but “the stock now loss fairly valued to us, hence our advice to book profit and look for a better entry point,” when neighborhood EV industry growth decelerates.

Wen said Geely’s downgrade is a valuation call, as the stock reached her price target.