BABA - Is NIO Still Investable? Depends On Whether You Can Stomach The Risks

• It has been a turbulent ride for NIO this year, especially over the past week as Chinese stocks experienced both the worst sell-off and biggest jump since 2008.
• Earlier this week, NIO posted sharp multi-day plunges following renewed concerns over delisting and regulatory risks.
• Then, the tide turned mid-week after China's state council vowed support for overseas listings.
• While we believe it is reasonable for NIO to trade at a discount to its Western counterparts to reflect the delisting risks for Chinese stocks, it should not be punished as hard as the Chinese internet sector for Beijing's regulatory uncertainties.
• Today, market is pricing NIO as if it were a declining business, when it is in fact still in early stages of growth. Paired with consideration of NIO's recent homecoming listing in Hong Kong, which provides partial protection from U.S. delisting risks, NIO could still be an investable option at current price levels.

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