On June 10, HSBC issued a report revising the target price for NIO Inc. (NIO.N/09866.HK). Specifically, the target price for NIO's U.S. shares was reduced by 8.9%, from US$4.5 to US$4.1, while the target price for its Hong Kong shares was lowered by 8%, decreasing from HK$34.9 to HK$32.1. Concurrently, HSBC retained its 'Hold' investment rating for the company. HSBC noted that NIO has navigated through the challenging first quarter and is poised to benefit from cost reductions. New and upgraded models are anticipated to bolster sales growth. Nevertheless, pricing dynamics and market competition remain intense. The bank anticipates that the launch of NIO's new products will contribute to a sequential enhancement in profit margins, driven by higher average selling prices and increased sales volumes. However, given the subdued sales outlook and persistent competitive pressures throughout the year, HSBC lowered its gross margin forecast for NIO by an average of 0.9 percentage points for the full years of 2025 and 2026. Additionally, based on a revised assumption of the Chinese yuan to Hong Kong dollar exchange rate at 1.06 by the end of 2025 (previously 1.08), HSBC derived a new target price of HK$32.10 for NIO's H shares. Amid uncertainties surrounding sales growth prospects in the second half of 2025, HSBC maintains its 'Hold' investment rating for NIO.