12:00 AM 7th September 2024
business
Opinion
Â
In the financial space,Max Georgiou, Analyst at Third Bridge made a series of remarks regarding Direct Line Insurance, informed by insights from industry experts:
“Although a return to profitability will be welcomed, Direct Line Group still missed consensus estimates. Strong premium growth highlights efforts to reprice their book, in the future investors will be paying attention to the impact of PCW distribution channels on growing their book, however, this may push down insurance margins as the carrier looks to compete more aggressively on price-impacting pricing momentum.
“At least GBP 100m of gross cost savings were promised in the CMD, our specialists believe this needs to come through streamlining operations and marketing spend, but risks cannibalising new business if marketing budgets are trimmed aggressively.”
In the automotive space, Rosalie Chen, Analyst at Third Bridge remarks on Nio:
“The price war in China’s new energy vehicle market became more intense during the first half of 2014. Third Bridge experts say that the price war evolved from last year’s price adjustments on existing models by major automakers to the introduction of more low-cost new models this year.
“NIO’s monthly sales in May and June both exceeded 20,000 units, and the actual deliveries in the second quarter surpassed the delivery guidance. Our experts believe this is mainly due to the following factors: (1) A decrease in BaaS rental fees and enhanced promotional policies increased consumer acceptance; (2) The buildup of sales personnel and the continuous expansion of sales channels; (3) The CEO and some city managers used social media to raise public awareness of the NIO brand.
“The biggest challenge NIO now faces is that, despite strong sales figures, investors still cannot see a clear path to profitability for the company. The future profitability of battery swap stations also faces limitations, as it currently seems that other car manufacturers find it difficult to accept the potential limitations brought by sharing batteries with NIO.
“Onvo is expected to positively impact NIO’s sales, but the extent of this impact is difficult to assess at this time. Despite NIO’s strong sales performance in May and June, Onvo’s order backlog remains high, estimated between 150,000 and 200,000 units, with a cancellation rate expected to be between 20% and 30%. Experts believe that the Onvo L60 and Xiaomi SU8 could capture half of Model Y’s market share.”
