Shares of Chinese electric-vehicle maker NIO (NYSE:NIO) were sharply higher on Monday morning, as U.S. investors returning from a holiday weekend reacted to a strong June sales report released late last week.
As of 10:15 a.m. EDT, NIO's American depositary shares were up about 23.5% from Thursday's closing price.
NIO released its June sales report last Thursday, right before the U.S. holiday weekend, and it was a good one: Sales in June were up 179% from a year ago; for the second quarter, sales were up 191% from the same period in 2019.
That sales gain is impressive in its own right. It also shows that NIO has fully recovered from the COVID-19-related shutdown earlier this year and is now reaping the benefits of the expanded sales network it spent big to put in place in 2019.
On top of that, a big investment from economic-development authorities in China's industrial heartland has put cash worries on hold for the time being, and it's given NIO sufficient funds and momentum to build its own factory near its headquarters in the city of Hefei.
Long story short: A few months ago, NIO was facing some tough questions from investors; most of those questions have now been answered.
NIO hasn't yet set a date for its second-quarter earnings report, but it's likely to happen sometime in the second half of August. Auto investors should be looking forward to it: NIO's CFO, Steven Feng, said last week that the big sales result gives him confidence that the company will be able to meet or beat its targeted gross profit margin.