International and local financial institutions were practically united on a GDP growth prediction of 7.4 percent for last year, a drop from 7.7 percent in 2013 and the first time in 16 years that the government has missed its annual growth target.
Despite missed sales target, Xiaomi was still at top in China last year
Premier Li Keqiang issued 2014's economic growth target of 7.5 percent in March. The last time the world's second largest economy missed its target was in 1998, in the wake of the Asian financial crisis. GDP growth that year was 7.8 percent that year, against an 8 percent target.
Fixed asset investment, which used to be the strongest driving force of the economy, may slip to 15.7 percent in 2014, he said, a slowdown from the 20 percent growth in 2012 and 2013, while industrial production growth is likely to decelerate to 8 percent last year from 9.7 percent in 2013. He said retail sales may expand by 12 percent in 2014, compared with 13.1 in 2013.
That said, we think Nio stock looks like a relatively good value at the moment. Although the stock still trades at a seemingly steep 12x projected 2021 revenues, Nio is growing very fast. Sales are projected to more than double this year and to grow by almost 65% in 2022, per consensus estimates. We think the company should continue to fare well despite growing competition. The EV market in China is massive, with sales in 2020 standing at about 1.3 million units and sales are projected to grow by over 50% this year. [1] Nio could have an edge in China, being a homegrown brand that offers unique innovations such as battery-as-a-service.
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