Behind the rise of Tesla and Wei Xiaoli, the value of the car is being revalued, and now the traditional car companies that have slowed down have begun to transform in full force, with the help of system capabilities in this century-old great change of the long run, become the dark horse players who are concerned by capital
Text | Wango
The automotive industry is facing major changes unprecedented in a century, the traditional value chain is being reshaped, and the industry is transforming from traditional manufacturing to technology companies. Car companies should Take To C (customer-user) as an important core asset and listen to their needs, and to To C (capital-capital) should concentrate resources from all walks of life, focus on research and development, and maintain the healthy development of enterprises.
Tesla, Weilai, Ideal, Xiaopeng and other new car-making forces in the overseas capital market after several rounds of sharp rise, the market value exceeded most of the traditional car companies, it is precisely because in the eyes of capital, they are already enjoying the treatment of technology companies, valuation is only the most significant representation. This also made the old forces jealous, envious, and hateful. In recent years, this logic has also examined China's auto industry throughout the year, on the one hand, the entire industry has been sought after by capital in the past two years; on the other hand, the industry has also shown a significant two-eight effect.
Wei Jianjun, chairman of Great Wall Motors
Whoever adapts to the new environment of value investment in the Chinese stock market first will win the future. Among the veteran Chinese car companies, there are many star enterprises that have been deeply cultivated for many years and have accumulated a lot of money.
In 2021, China's 28 car companies performed "mixed" in the capital market, 14 companies achieved "red" market value, 14 companies experienced a decline in market value, and 28 listed companies increased their market value by more than 106 billion yuan in 2021. Repeated epidemics, a worsening chip crisis, and sharp rises in international raw material prices have left all car companies, including Great Wall Motors, under pressure. However, Great Wall Motor's performance in 2021 has surprised all investors.
According to the sales report released by Great Wall Motor, the company's cumulative sales volume for the whole year of 2021 was 1.28 million units, an increase of 15.2% year-on-year, a record high, and Great Wall Motor exceeded one million sales for six consecutive years. At the same time, as of December 31, 2021, Great Wall Motor's market value was 448.290 billion yuan, an increase of 29.21% compared with 346.943 billion yuan at the beginning of the year, ranking second in the market value list of Chinese car companies.
From the self-reflection of "whether Great Wall Motors can survive next year" in 2020 to the seemingly radical strategic goals of 2025, Wei Jianjun, who has a deep sense of crisis for the future, is self-revolutionizing and reshaping Great Wall Motors.
The hot sales of models have become the cornerstone of the stock price
In the period of in-depth change in the automobile industry, there are two perspectives for the capital market to look at car companies. First, as an automobile manufacturing enterprise, it has a strong cyclicality, mainly depending on the company's product launch planning and sales; second, as a pan-technology company, look at the growth trend and space of its innovative technology.
As the above two intertwined, the current electrification and intelligent network technology has been on the car, sales as a hard indicator, expressing the attitude and willingness of consumers; such as the above two generalization, derived from the rhythm of product delivery, the layout of the industrial chain, core technology breakthrough points and so on.
Great Wall Motor exceeded expectations to achieve its full-year sales target of 1.21 million units. According to public information, in the whole year of 2021, Great Wall Motor's cumulative sales reached 1.281 million units year-on-year, an increase of 15.2%. New energy vehicles sold 137,000 units in the whole year, accounting for 10.7% of the overall sales. Sales in overseas markets were approximately 142,800 units, up 103.7% year-on-year, accounting for 11.1% of sales, and cumulative overseas sales exceeded 900,000 units. Under the influence of the overall lack of cores in the automotive industry, this figure is not easy to achieve. Under the blessing of core technology, the company's brand premium ability has been improved, and according to the third quarterly report of Great Wall Motors, the company's average bicycle price reached 102,700 yuan, an increase of 12.5% year-on-year.
As the first TohW Motor to recover from the epidemic in 2020 and performing well, it is one of the traditional car companies with the fastest rising stock price. In just 3 months in 2020, the company's stock price rose nearly 4 times, and its market value rose from 70 billion to more than 260 billion yuan. But in November 2020, Wei Jianjun said that "the current market value is seriously undervalued, and the capital market has not yet found our value." ”
Haval Big Dog
In the process of rapid change in the value of the automobile industry, two paths for enterprises to change lanes and overtake are given. Some people in the private equity industry told the author that one is the evolution of independent car companies that already have a production and marketing scale, taking a growth path similar to Toyota; the other is to give birth to a few new car companies and copy the path of Honda's development by taking advantage of the oil crisis. In his view, Great Wall Motors has the genes of the former and is doing the layout of the latter.
In the communication, a number of people in the capital industry mentioned Great Wall Motors, and they said that they were happy that the upgrade of Great Wall Motors' product strategy was user-centric, evolving from large single products to product matrix. Each of them mentioned the Haval H6, and in the past 10 years, the three generations of models have always maintained the leading position in domestic SUVs, becoming the longest life cycle of independent brand cars. This shows that Great Wall Motors is familiar with the minds of consumers, the technical ability of product iteration, and the control of sales channels, which realizes the equilibrium point of volume and price.
On July 20, 2021, Great Wall Motor officially disclosed the 2021 interim results express, and the excellent report card quickly stirred up the capital market. In the following time, Great Wall Motor's stock price doubled, and the company's latest market value repeatedly reached new highs. In August last year, Great Wall Motor's stock price once surpassed that of century-old car giants such as Ford Motor and Honda Motor.
In the third quarter of 2021, Great Wall Motor's asset-liability ratio was 64.63%, the current ratio was 1.25, the quick ratio was 1.10, and the cash ratio was 0.36; the inventory turnover days were 36.34 days, and the accounts receivable turnover ratio was 2.88; while the wind automobile manufacturing industry (Chinese mainland stocks, Hong Kong stocks, and US stocks) related values were 63.32%, respectively. The current ratio is 1.25, the quick ratio is 1.10, and the accounts receivable cycle is 2.86, which is close to the median value and remains relatively healthy.
Nowadays, Great Wall Motor's product matrix capabilities have become more and more prominent: Weipai, which sprints to the high-end category of 150,000-300,000 yuan, Haval, which focuses on the mainstream passenger car market such as families and young users, tanks with intelligent off-road attributes, Euler that serves female consumers with small electric vehicles, cost-effective pickup trucks, in addition to the salon of raw new energy attributes and the joint venture brand beam with BMW.
Tank 300
Returning to the annual sales point of view, in 2021, Great Wall Motors' key models received good market feedback, with Haval H6 selling 370,400 vehicles and Haval Big Dog selling 100,700 vehicles throughout the year; Weipai Mocha selling 28,500 vehicles, Euler Good Cat selling 50,900 vehicles, Euler Black Cat selling 63,500 units, and Tank 300 selling 84,600 units.
With the development dividend, technical level and brand image upgrade of SUVs, since 2005, Great Wall Motor's market share in the passenger car market has increased from 1% to 5%. Not only that, with the rise of independent brands in the domestic market, Great Wall Motors is expected to become an independent leader. Soochow Securities said in the research report that Great Wall Motors ranks in the forefront of Chinese brands, and the electric intelligent architecture is laid out from the bottom, and the probability of impacting the independent leader is the largest. In the long run, the market share of Chinese brands in domestic sales is expected to exceed 50% (corresponding to annual sales of 13 million to 15 million vehicles), and Great Wall Motors is expected to occupy 1/4 of them, that is, the company's annual sales exceed 3 million vehicles.
Market information is derived from this, as of January 12, 2022, according to the Wind client, more than 97.3% of analysts have given a buy or overweight rating.
Science and technology empowerment tells the "story" of innovation and development
The stock price without performance support is a bubble, which is broken when it is broken, and the market value management of car companies can be regarded as a new topic, and there is no fixed answer. Many car companies have proposed to transform into technology companies, but the capital market does not buy it, mainly because capital does not believe that car companies have the strength of technology companies.
To seek change is to survive, and to survive cannot rely on perseverance, but on the courage to innovate. Great Wall Motors is no exception, if there is no future-oriented competitiveness, it will be a void.
Reform must be accompanied by a breakthrough in ideas. At the moment when the market recognized Great Wall Motors, Wei Jianjun and the company's executives were self-reflecting and wanting the company to die. "What does the future hold? In my opinion, life hangs in the balance", "If we can't subvert ourselves, then we will definitely be subverted by others". Such a decision is rare.
Transformation is imminent, but it is more necessary to grasp your own rhythm. In 2020, Great Wall Motors put forward the goal of "transforming into a global intelligent technology company" and released the 2025 strategy last year, which will carry out comprehensive changes based on the new positioning of global layout, large investment in research and development, great changes in enterprises and large operations of users. Great Wall Motor plans to achieve global annual sales of 4 million vehicles by 2025, of which 80% are new energy vehicles; operating income exceeds 600 billion yuan; and cumulative R&D investment reaches 100 billion yuan.
This means that in the next few years, the average annual compound growth rate of Great Wall Motors will remain above 25%, and the average price of bicycles in 2025 will be more than 150,000 yuan. Such an aggressive KPI target, what is the basic support point of Great Wall Motors?
In fact, Wei Jianjun has long realized that if the core technology is not in his own hands, he will always be subject to others. At the 30th anniversary celebration of Great Wall Motor, Great Wall Motor released three major technology brands of "highly intelligent modular technology platform - lemon, intelligent professional off-road platform - tank, and new electronic and electrical architecture - coffee intelligence", covering the whole industry chain of automobile research and development, design, production and automobile life.
Among them, the two major platforms of "Lemon" and "Tank" are the intelligent and modular model platforms of Great Wall Motors that lasted for five years and invested more than 20 billion yuan in research and development, facing the global market. "Coffee Intelligence" is an intelligent system built for intelligent cockpits, intelligent driving and intelligent electrical and electronic architecture. These three have become an important force supporting the rapid innovation of Great Wall Motors' future products, and will quickly promote its transformation from a traditional automobile company to a global intelligent technology company.
"New energy and intelligent vehicles are becoming a new engine for the development of the automotive industry, and we have certain advantages in these two areas, but the window period is very short and fleeting." If Chinese auto brands want to achieve transcendence in the true sense, only in these three to five years, rapidly enlarge the advantages, it is possible to lead the new track of new energy and intelligence. Moreover, there is only one chance for Chinese car brands. Wei Jianjun said.
It is undeniable that the future development prospects of enterprises are an investment indicator valued by investors. However, some analysts pointed out that the technical reserves of Great Wall Motors have been relatively mature until now, but most investors still know very little about it. Whether a company tells a "story" and the ability to make a "story" a reality will change investors' impression of Great Wall Motors, and the valuation system of its market will also rise.
At present, the most attractive "story" for capital is intelligence and new energy. At the same time, Great Wall Motors has deeply cultivated two fields, and has come up with the results of the industry's attention.
Based on its understanding of the industry's future core technologies, Great Wall Motors will independent the power battery division as Honeycomb Energy in 2018, Xiandou Intelligent, a smart cockpit company, in 2019, and the ADAS (Assisted Driving) system R&D team as Independent in 2020.
As an autonomous driving company under Great Wall Motor, the main business of Momo Zhixing includes passenger car assisted driving systems and solutions, low-speed unmanned vehicle ecosystem and solutions, and product development and customization services related to assisted driving. L2-level driver assistance features have been developed, and the company expects its L2 assisted driving to be available in 34 models by the end of 2022.
It is worth mentioning that just last December, Zhixing announced that the company received nearly 1 billion yuan of A round of financing, and the investors were Meituan, Hillhouse Venture Capital, Qualcomm Venture Capital, First Trip Holdings, Jiuzhi Capital, etc., and the funds raised will be mainly used for investment in autonomous driving research and development and the construction of talent system.
Zhang Kai, chairman of Zhixing, said that 2022 will be the most critical year for the development of the autonomous driving industry. Competition in the field of passenger car assisted driving will officially enter the second half, and autonomous driving in other scenarios will also officially enter the first year of commercialization.
If Great Wall Motors is regarded as a strong competitor of future giants, it is not only necessary to see whether its business model is growing, but also the layout of the industrial chain is also crucial.
Wei Jianjun believes that the biggest value of the enterprise is the ecology, and Great Wall Motors has significant advantages in this regard, the supply chain is in its own hands, and most of the core technologies are mastered. Whether it is technical reserves, R & D systems, and unique organizational ecology, Great Wall Motors is an enterprise with ecological advantages.
At present, Great Wall Motors has five core component companies, namely: Honeycomb Easy Creation, Mande Electronics and Electrical Appliances, Weishi Energy, Seiko Automobile, Nobo Automobile, covering power system, optoelectronics, thermal system, hydrogen energy, wire control chassis, electric drive system and other fields. The purpose of independent parts companies is to promote the independent opening of parts business, realize market-oriented operation, and enhance comprehensive competitiveness.
Among them, the hive energy, which is partially differentiated from the power battery, is constantly expanding its own strength. In August last year, the installed capacity of Hive Energy exceeded that of listed companies such as Ewell Lithium Energy, Sunwoda, and Fu Neng Technology, and advanced into the industry TOP5.
In the first half of this year, Great Wall Motor's parts business revenue reached 6.72 billion yuan, an increase of about 70% year-on-year, with Great Wall Motor's technical accumulation in the core components of fuel vehicles and new energy vehicles, relying on internal supply and external expansion, the parts business is expected to become a new growth point.
In addition, the layout of hydrogen energy is another major strategic move of Great Wall Motors. In March last year, Great Wall Motor's hydrogen energy strategy was officially released, hoping not only to build an international-level "production-storage-transportation-plus-application" integrated supply chain ecology, break down core technical barriers, connect upstream and downstream industrial chains, and accelerate the commercialization of hydrogen energy.
It is understood that in 2022, Great Wall Motor's first high-end passenger car service fleet will appear on the stage of the Winter Olympics; in 2023, it will lead the number of core power components in China, and in 2025, it will refer to the top three in the global hydrogen energy market share.
For example, Guan Qingyou, president of the Institute of Financial Research and chief economist, said that the use of hydrogen energy is likely to be the ultimate solution to solve road travel, and companies such as Japan and South Korea have also carried out research and development and application work in this area very early. As a representative of Chinese enterprises, Great Wall Motors actively plans the application of hydrogen energy in the whole industry chain, which is a strategic measure.
It is not difficult to see that Great Wall Motor's layout in the new energy industry chain and intelligent industry chain has left the traditional car circle, which also allows investors to have more imagination space for the market value of Great Wall Motors.
Divide the cake with Wei Jianjun's management philosophy
As an excellent enterprise, it must have both external hard power and internal soft power. An enterprise with vitality is often the continuous construction of soft power, so that the enterprise can always maintain its vitality and vitality in the change of the times.
"Let the comrades closest to the gunfire make the decision!" We carried out internal reforms, established multiple combat units, fully decentralized, and activated ourselves. Wei Jianjun said: "Weapons and technology are in the headquarters, and the theater is responsible for combat. ”
At the level of internal organizational management, Great Wall Motors reconstructed the company's organization, mechanism, process and enterprise ecology, forming a 3.0 version of the organizational structure of "strong back office, large middle office, small front desk", and the organizational form of "one car, one brand and one company". In this way, a company becomes a number of companies, so that each group is based on its own development purpose, to create the products that users want, so as to enhance market competitiveness.
The founding entrepreneur is the soul of the company, giving the company its own taste and determining the company's ceiling. In order to maximize the subjective initiative of employees in Chengdu, Great Wall Motor launched the largest equity incentive plan in the company's history last year, with more than 400 million stock option incentives and more than 9,000 people as incentive objects.
As early as January 2020, Great Wall Motor issued the first phase of the equity incentive plan, which intends to grant 109.909 million stock options to 1672 incentive recipients and 68.4409 million restricted shares to 294 incentive recipients. Compared with the first phase of the equity incentive plan, the second phase of the equity incentive plan released last year has a wider range of benefits, and the number of incentive objects and stock options has increased significantly.
The incentive tools used in the second phase of the equity incentive plan are stock options and restricted shares, and the source of the shares is the A-share ordinary shares of the company issued by Great Wall Motors to the incentive recipients, and the proportion of the first grant is 80%, and 20% is reserved.
Among them, 397,101,000 stock options to be granted to incentive recipients, accounting for about 4.317% of the total number of shares in the company at the time of the announcement of the draft incentive plan, and 8,784 incentive objects; It is proposed to grant 43.184 million restricted shares to the incentive recipients, accounting for about 0.469% of the total number of shares in the company at the time of the announcement of the draft incentive plan, and the incentive objects will not exceed 586 people.
Up to now, the total number of recipients of Great Wall Motor's equity incentive plans in 2020 and 2021 is more than 11,000, accounting for nearly 1/5 of the total number of employees in the company.
However, while launching the equity incentive plan, the weight of the company's sales target has also increased, and the assessment target has become more challenging.
The author understands that the exercise assessment year of the incentive plan is the three fiscal years from 2021 to 2023, the sales assessment targets are 1.49 million vehicles, 1.9 million vehicles and 2.8 million vehicles, and the net profit assessment targets are 6.8 billion yuan, 8.2 billion yuan and 11.5 billion yuan, respectively. According to the target value set this time, the average annual sales growth rate of Great Wall Motors in the next three years is about 36%.
Wei Jianjun knows very well that making a "cake" and sharing a "cake" are not two processes, but a process. In the market, income is earned, not divided. If no one buys your stuff, you have no income. The "cake" can be made bigger if it is reasonably divided. The so-called reasonable, that is, everyone in the market can rely on ability, hard work, diligence to obtain wealth, so that everyone has the enthusiasm to make a "cake". At the same time, Great Wall Motor will highly bundle the exercise assessment of the incentive plan with sales volume, giving each employee a quantifiable target and reward. This model has been proven effective by Huawei and many foreign-funded companies, which can greatly improve the combat effectiveness of enterprises.
In the follow-up, Great Wall Motors will implement a wide-coverage equity incentive model on a rolling basis, and will cover 100% of value employees in the future. From "hitting workers" to "partners", Great Wall Motors gives its partners the greatest respect and respect. At the same time, large-scale equity incentives have also attracted more cross-field, cross-cultural, cross-border talents and business backbones for Great Wall Motors, laying a solid foundation for continuous technological innovation and realizing the common development of enterprises and talents.
Unity of knowledge and action is not easy. How to build a sound system, incubate small giants, let the growth of subsidiaries be relaxed, and form an "aircraft carrier formation" will become the biggest challenge for Great Wall Motors and Wei Jianjun in the next few years. However, we can still expect that under this mechanism, Great Wall Motors will burst out greater potential energy and set up a long-term power source for technology and product innovation.