Okay folks, so as we approach the end of the year, I want to present my raw research on one specific stock that I believe is dramatically undervalued and has almost been completely missed by this market cycle. And I want to give an exact number on where I believe it's going to be trading in 2022, at least at fair value. The only thing that I ask in return is that you hit that ravishing like button and also don't forget to subscribe either. Also, quick plug our Black Friday 100 sale has begun.

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Marquette to fairly risk off. Today you've seen some of the huge froth that we saw over the last month that propped up a lot of stock start cooling down a little bit. The stock market has been increasingly in a little bit of a wait and see mode as we head into this holiday season, but today I want to cut straight to the work. Madame Neo, Miss Neo, Mrs.

Neo. Who knows if she's married or not. but the fact of the matter is that despite massive inflows into the Ev companies over the last couple of weeks, Miss Neo, she hasn't moved much. If she has a husband, the husband's damn well disappointed in her.

But I want to discuss why I believe the market's making a big mistake right now overlooking Miss Neo. We are going to start by talking violently about the pros and cons, the competitiveness with its competitors, here, by your revenue breakdown, and how that corresponds to the yearly increase in Neo's fair value, and at what point I see Neo hitting which price, and then we're going to finish off with some upcoming catalysts to look forward to. We'll start with the pros and cons list. So Neo is in the largest electric vehicle market China.

Say what you want about China and there's a lot you could say about it, but it is the largest Ev market and it's projected by most analysts to be the fastest growing. Neo has also been around for a while relative to other players, and it has a huge number of total lifetime deliveries, which is what? Well, that's track record. That's experience that's having proof of concept and it has a lot more experience and a lot more proof of concept than most of the other companies at similar valuations. It's also become much more integrated in-house especially because of this whole supply chain issue.

The battery as a service model is also something that I like quite a lot with Neo. A lot of analysts hate this. I love it. It's a very interesting change of pace from a lot of the other Ev companies, and it allows Neo to sell and really outsell its vehicles at cheaper prices.

Specifically because it's not selling it with the very expensive battery. She's instead giving batteries out on a subscription basis. This allows them to lock in reoccurring customers and you're less likely to feel like your model is obsolete when battery technology improves because you can just swap it out, you're just paying a subscription fee. European Expansion: They've just started expanding into Europa, starting with Norway, and they reported on the last earnings report that they had a much larger than expected inflow.

They are also expected to expand into Deutschland, which is Germany in 2022. Demand for vehicles overall has stayed very, very strong despite production delays and shortages. That said, that's not just Neo that's having that issue. It's also all the other Ev companies are having shortages, but demand still seems to flow in very, very nicely.

There seems to be a massive, massive overflowing and demand in terms of Evs in general, so that's great for Neo, but it's also true for a lot of other companies. I'll just say that they also have more models coming, specifically the Et7 and Q1 of 2022, which should help bolster the next few quarters. We've talked a lot in the past about the Et7 and how Et7 is going to allow Neo to really, really, really compete in the segments that it's not competing in yet. Of course, their models have competitive specs in terms of battery life and performance, and overall looks.

I mean, looks are subjective, but they do have very competitive specs. They have government backing, good relations with local and regional governments. I don't like the Ccp, but when you're a company that's in the favor of local governments and the overall party, truth be told, well, you're probably going to see more benefits than most. Another pro is we expect strong November deliveries after the fairly disappointing October, where they were more focused on upgrading and prepping supply chain.

It's my understanding that it's a lot more active right now and they also have a large backlog of orders to go through, so odds are strong that we see a very, very strong November and December. They are also investing heavily in expanding out manufacturing capacity. With the company's estimates at 240 000 vehicles per year by first half of 2022, that's some of the highest levels of the industry now. Cons: Again, the Ccp.

Like I said a few minutes ago, I think that Neo happens to be in a positive crosswind of the Ccp because they're trying to accelerate their push into electrification, and that's sort of like what the party wants to do to make themselves look really good on a global stage, for whatever reason. But I think that quite simply the difference in governance philosophy is always going to be something that hangs over my head and over a lot of American investors heads. And it's something that you have to discount when it comes down to pros and cons. Definitely not gonna pay American prices for a company like this, because guess what? You got it in this environment that I don't agree with.

That's why we have about three or four companies that I like in the Chinese market, and that's about where I leave it. In this case, I think you have to balance for yourself whether the massive market and the price to sales ratio that we're gonna be talking about later outweigh the risk associated with that. The other issues: They have some short-term supply chain setbacks. Again, they are upgrading and prepping for a new model launch, and other industry-wide shortages have helped them back.

I'm not too worried about those. they've been a lot more stubborn than I've wanted them to be, but so is everything. that's that. I see a lot of these easing dramatically in 2022, if not completely.

Also, rising competition. X-peng and Lee have blown us away all year. We also like those companies, but overall, the market expansion in China is so damn large that I'm not super worried about the room that Neo has to grow into. I think that even if Neo screws up and isn't super competitive anymore, which I think they're going to be very competitive.

But even if they screw up, they still probably are going to earn a lot higher of a valuation. But before we get into more comparison metrics, I did want to note some analyst price targets. Here You have Goldman Sachs ranking it at 56 City at 87., Deutsche at 70, and Morgan Stanley at 64. I usually don't agree with analysts very much, but you see almost unanimous support for higher prices for Neo.

Doesn't mean that it's a good deal. They've been wrong before. I've been wrong before, but something to consider in your own analysis. Okay, next comparison time.

So Lucid Delivery is estimated in 2021 or 577. It's market cap at the last close was around 85 billion rivien at perhaps 1 000 deliveries in 2021 at best. And it's at 122 billion in market cap. And now you have Neo.

Miss Neo at just under 90 000 deliveries in 2021, and it's the cheapest at 60 billion in market cap. I love all three companies, especially Lucid, but when you compare it at these valuations and what they're doing right now, obviously the ones that have a lot more to prove in their markets are these two, but they're trading at much higher multiples now. Obviously 2021 deliveries aren't exactly fair because these are just starting. But let's go ahead and look over at 2025 and what I see is the best case scenario for the first two companies: Lucids at 135 deliveries Reviewing at 150 000 deliveries, Neo is at 500 000 deliveries, Deutsche Bank analysts actually think that this number is closer to 750 000.

and 121 000 for Nia. And again, we are assuming that Lucid and Neo are going to be able to scale up manufacturing from basically nada to insane numbers within a couple short years. I don't think that that's going to happen as easily as the market thinks it is, especially with Rivien. I think that Lucid has a solid chance, but I'm not going to say it's as likely as Neo, which is already doing numbers that aren't that far off from these numbers that it could do in 2025.

But the point is, no matter what way you look at it, I would argue that the market is overpricing in stocks with very little proof of concept in the present day, and it's ignoring stocks with very, very high proof of concept in the present day like Nia And you could say yeah. But Charlie the Ccp, we have to pay less for Neo because of the Ccp and I agree, but to what extent? Again, to me the Ccp has only done things in favor of Neo. but still, you got to discount it because I don't agree with the philosophy. so I'm not going to take on as much risk I need to be compensated.

But to what extent does Neo get discounted based on that? Does it trade at 1 one-sixth evaluation or one-eighth evaluation Because of it? I'd argue the risk of Rivian not being able to meet deliveries in 2025 is substantially higher than the China Factor or the risk of the Chinese going and screwing Neo. Quite simply, what's going on here isn't just a Chinese risk, it's an over over overdoing of Chinese risk. But that said, what is the fair estimate for Nia? Well, I went ahead and I used Seeking Alpha's analyst average revenue stats through 2030 to come up with a fair value outlook that isn't as biased as I'd give it. And for 2021, we are looking at an average estimate at 5.6 billion, then 9.52 then 13.96 and then 16.7 skipping ahead to 2030 just based on the overall trajectory you're like at 53.7 billion.

I'm not a fan of valuing that far out. I don't know how analysts come out with things that are so far in advance, because quite frankly there's just too many variables and too many unknowns in that time span. But anyways, assuming these revenue numbers and some steady five percent dilution year over year for the first four years, which slows down later in the 20s, Well, you're looking at a 15x sales fair value price in 2021 at 51 and 40 cents. Which means that even based on the current numbers, I'd argue that Neo is undervalued.

But when you get into 2022, you're looking at a fair value estimated 82, 20, 23, 115, and 20 24 131. And obviously it's starting to get way too speculative when we were talking about 2030. But still, at what point does the added risk of China start getting way over factored in? I would argue that being in China means that you should face a shorter term time horizon when you're making a price target. I'd argue if Neo is based in the U.s and doing these same numbers that it's doing today, it would probably be trading at somewhere as high as 115 bucks using 2023 numbers.

Now it's not in the Us, it's in China, and that means that you have to look shorter term. You have to look maybe at 2022. but at 2022 at a shorter time frame, you still have a lot of upside. And this is what I would say is about the fair value that you can expect in 2022..

even if they miss on a lot of these revenue estimates, it's still dramatically undervalued. What's interesting is that you have a market that's willing to take a massive, massive risk in terms of going very, very, very far out in sales numbers for certain companies, But for others, there's sort of that one guideline that's like, yep, I don't want to touch that and I get why. But I think that's a mistake because if you look at the past, there's always periods where people are like, oh, I don't want to touch that And then what happens? Well, they start touching it and they start touching it way way way too late. But anyways, you can mess with the multiples a bit if you want.

you can mess with the time span, but no matter what way you look at it, it seems like the market has dramatically undervalued Neo, and I think that once you start seeing their deliveries pick up massively in 2022 and their new models and their expansion into Europe, the market's gonna wake up and say hey, wait a second, This is way way under value. And lastly, what about upcoming catalysts for the stock? Well, we have Neoday on December 18th. You have supply chain issues coming under control in 2022, specifically a new battery expected in Q1, which should help solve some of the bottlenecks we are seeing right now. We have further expansion into Europe and of course two to three models will be introduced next year, including the Et7, as well as more battery swapping stations and overall production capacity.

We spoke about that a bit, so certainly you have a lot to look forward to. But anyways, that's my take on the company. Let me know what you think about Neo down below. If you'd like to learn how to trade, with our step-by-step lessons, our private chat, and of course our daily morning briefings, Well, I'll go ahead and put a link to Zip Trader you below.

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that caps off the video. Have a good one. I'll see you in the next one.