NIO’s fourth-quarter net loss unexpectedly widened as higher costs outpaced sales growth after the carmaker launched two subbrands last year amid intensifying competition in China’s electric-vehicle market. The Shanghai-based automaker said Friday that its net loss widened to 7.13 billion yuan, equivalent to $983.7 million, from 5.59 billion yuan a year earlier. Revenue rose 15% to 19.70 billion yuan. The results missed consensus estimates of a 4.63 billion yuan loss on revenue of 22.22 billion yuan, according to a Visible Alpha poll. The weaker-than-expected figures suggest that NIO is facing cost-control challenges and raises the question whether it can boost sales amid a saturated Chinese EV industry. For the full year, NIO’s net loss widened to 22.66 billion yuan, while its revenue rose 18% to 65.73 billion yuan. NIO is considered one of the top three emerging EV brands in China, along with XPeng and Li Auto. But unlike XPeng, which consistently delivers double-digit gross margins and has a strong pipeline of new models this year, it hasn’t been able to overcome the challenge of scaling up sales. NIO’s gross margin rose to 9.9% last year from 5.5% in 2023, but the improvement paled in comparison to XPeng and Li Auto, which reported gross margins of 14.3% and 20.5%, respectively. Its fourth-quarter gross margin climbed to 11.7% from 7.5%. Some analysts say the company may be facing pressure in controlling costs. CCB International analyst Qu Ke noted that the Chinese automaker’s costs grew faster than it sales did because of the launch of two new brands, Onvo and Firefly, last year. The company has tried to set itself apart in China’s crowded EV space by focusing on advancing battery technology. It relies on battery-swapping stations rather than battery-charging ones for better efficiency, but the former requires higher setup costs. The EV maker earlier this week announced a partnership with battery giant Contemporary Amperex Technology to build a battery-swapping network for cars. It said CATL is working on a 2.5 billion yuan strategic investment in the company as part of the deal, which could help boost NIO’s position in the EV market. Investors welcomed the move, sending its Hong Kong-listed stock up as much as 18% in a day before paring gains. For the first quarter, the EV maker guided for vehicle deliveries of between 41,000 units and 43,000 units, up 36% to 43% from a year earlier. It expects revenue to climb 25% to 30%, reaching between 12.37 billion yuan and 12.86 billion yuan. NIO’s American depositary receipts edged 4.5% lower.

Economic concerns weighed on the Swiss stock market on Friday. The SMI lost 0.2 per cent to 13,075 points. Among the 20 SMI stocks, there were 14 losers and six winners. A total of 60.45 (previously: 25.6) million shares were traded. The above-average trading volume was due to the large expiry date. At the top of the SMI were Swisscom, which is considered defensive and rose by 1.3 per cent. Roche gained 1 per cent. Nestlé (+0.5 per cent) was unimpressed by the downgrade to ‘Sectorperform’ from ‘Outperform’ by analysts at RBC. Richemont, which had been burdened by disappointing watch export data on Thursday, recovered by 1.3 per cent in a countermovement. Swatch was 0.3 per cent higher. Givaudan (-3 per cent), traditionally a rather defensive stock, posted losses. Economic cyclicals ABB (-1.6%), Geberit (-1.4%), Holcim (-1.2%) and Sika (-2.4%) also recorded significant share price declines.

Europe
The European stock markets retreated on Thursday following cautious comments from major central banks on the macroeconomic environment. The Stoxx Europe 600 index fell by 0.4% to 553.0 points. In Paris, the CAC 40 and SBF 120 were each down 1%. The DAX 40 lost 1.2% in Frankfurt, while the FTSE 100 shed 0.1% in London. ESSO (+14%): the specialist in the refining and distribution of petroleum products announced on Wednesday that it would pay a sharply higher dividend for 2024, despite a contraction in its revenues due to lower refining margins. SODEXO (-17%): the contract catering group issued a profit warning on Thursday for its financial year ending at the end of August, as organic sales growth turned out to be weaker than expected in North America. SANOFI (-1.7%): the pharmaceutical company confirmed on Thursday that it had reached a definitive agreement to buy an antibody from US biotech Dren Bio for a total of up to $1.3 billion (around €1.19 billion).

United States
Stocks edged higher in the final minutes of Friday’s trading session after a week of big swings. Concerns over the impact of President Trump’s trade policies continue to hang over markets. The European Union has said it will adopt retaliatory tariffs against the U.S. in April. The S&P 500 rose 4.67 points Friday to close at 5667.56, up 0.51% for the week. The Dow Jones Industrial Average rose 32.03 points to close at 41985.35, up 1.2% for the week. The Nasdaq Composite rose 92.43 points to close at 17784.05, up 0.17% for the week. The shutdown of London’s Heathrow Airport, a major international hub, snarled air travel and knocked European airline stocks. Shares of American Airlines and United Airlines rebounded from morning dips after some flights resumed late Friday. Among individual shares, Nike posted a very weak performance with losses of 5.5 per cent. Although the sporting goods manufacturer reported a smaller decline in profits than feared in its third quarter, its outlook was disappointing. FedEx presented third-quarter figures below market expectations and lowered its outlook, which pushed the share price down by 6.4 per cent. The logistics company is considered to be an economic barometer in its own right. Tesla, on the other hand, rose by 5.3 per cent. The e-car manufacturer intends to build 5,000 of its humanoid Optimus robots this year, as CEO Elon Musk said. He also encouraged employees and investors to hold on to their Tesla shares despite the recent losses. Micron Technology earned more than expected in the second quarter. However, market participants criticised the margin forecast. As a result, the share price plummeted by 8 per cent. Good first-quarter figures did not help Lennar (-4.1%), as the housebuilder warned of a weak property market. Luminar Technologies jumped 33 per cent after the loss turned out to be smaller than feared.

Asia
Stocks in Asia were more or less treading water on Monday. In Tokyo, the Nikkei 225 index was little changed at 37,687 points. The Kospi in Seoul fell by 0.2 per cent. In Shanghai, the Composite Index declined by 0.2 per cent. On the Hong Kong stock exchange, the Hang Seng Index climbed 0.1 per cent. Among individual stocks, Sinopec dropped by 2.8 per cent in Hong Kong. The oil company earned less than expected in 2024. In Sydney, the share price of James Hardie plummeted by 14.5 per cent. The building materials supplier announced the purchase of Azek, which is listed on the US stock exchange, for a price of USD 8.75 billion.

Bonds
U.S. government debt yield finished mixed on Friday but lower for the week, with traders focused on the risks of slower economic growth coupled with higher inflation and traders continued to absorb the Federal Reserve’s dovish take on the impact of tariffs. The 10-year Treasury note yield gained 3 basis points (0.03 percentage points) to 4.26%. The 2-year Treasury note yield dropped 1 basis point to 3.97%.

Analysis
Barclays downgrades Holcim to CHF 80 (84) - Underweight
MS raises VAT Group to Equalw. (Underw.)/315 (300) CHF - Trader
JPM upgrades Swiss Re to CHF 170 (160) - Overweight
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