NIO Inc NIO shares are trading lower Wednesday as COVID-19 cases surge in Guangzhou and other Chinese cities.
What Happened: According to a Reuters report, COVID-19 cases are rising quickly in global manufacturing hub Guangzhou. The report indicates that the region is becoming China’s latest COVID-19 epicenter.
New locally transmitted infections jumped to 7,475 nationwide as of Nov. 7, up from 5,496 the day before, per China’s health authority. The new infection numbers are the highest in China since May 1.
“We are seeing a game between rising voices for loosening controls and rapid spreading of COVID cases,” Nie Wen, a Shanghai-based economist at Hwabao Trust, reportedly said.
The economist also reportedly downgraded his fourth-quarter economic growth outlook to approximately 3.5% from a prior range of 4% to 4.5%.
The spike in cases weighed on stocks in Hong Kong on Wednesday, with the benchmark Hang Seng declining by more than 1%.
What Else Is Happening: Deutsche Bank analyst Edison Yu maintained NIO with a Buy rating on Tuesday and lowered the price target from $39 to $20 ahead of the company’s third-quarter results.
Nio is scheduled to report its third-quarter financial results before the market opens on Thursday. The company is expected to report a net loss of 16 cents per share on quarterly revenue of $1.79 billion, according to Benzinga Pro.
Nio competitor Tesla Inc TSLA also reportedly stole the show at China’s world’s largest import trade fair over the weekend. Tesla reportedly attracted “huge crowds” at China’s International Import Expo, per the South China Morning Post.
NIO Price Action: Nio has a 52-week high of $33.80 and a 52-week low of $8.37.
The stock was down 11.6% at $9.34 at time of publication, according to Benzinga Pro.
Photo: courtesy of Nio.