Traditional car companies plan to split and list, new forces turn to Hong Kong stocks, and "car-making waves" pour into the track

Financial Associated Press (Beijing, reporter Xu Hao) news, in the capital market that values growth and imagination space, the new energy track will flourish in 2021. From the rising stock price of new energy stocks, to the ideal, Xiaopeng's return to Hong Kong stocks, and then to Rivian's creation of the world's largest IPO this year, and FF's "backdoor" listing, let the latecomers see the dawn of the capital market; and Geely and Weima have successively broken through the failure of the science and technology innovation board, which has made more latecomers re-examine the future direction of financing.

On January 19, it was reported in the industry that Huaren Express, a new car manufacturer that achieved 4,237 insured vehicles in 2021, is considering a $500 million Hong Kong IPO and has reached cooperation with UBS and Morgan Stanley. As of press time, Huaren Express has not yet made a statement.

Not only Chinese Express, as we all know, car building is a war of attrition of funds and resources. Some investment institutions believe that new energy vehicles still have a high prosperity cycle of 2 to 3 years in the future, and latecomers will not let go of such a vent period.

Traditional independent brand "practice trumpet"

Since 2021, the traditional independent brand "Lianxiao" has become a trend, SAIC, Dongfeng, Changan, GAC, Geely, Great Wall and other brands have launched their independent new energy brands, and a number of traditional car companies have revealed their intention to spin off the new energy business and go public.

Just on January 18, Changan Automobile's Changan New Energy B round of financing was settled, and the amount of capital increase increased from 3 billion yuan planned at the beginning of last year to 4.977 billion yuan. Among them, Changan Automobile intends to increase its capital by 1.36 billion yuan, and after the completion of the capital increase, its shareholding ratio will be diluted from 48.95% to 40.66%. Among the top five capital increasers, Southern Industrial Asset Management plans to increase its capital by 710 million yuan, BOCOM Boyu No. 1 intends to increase its capital by 1 billion yuan, Chengyuan Fund intends to increase its capital by 700 million yuan, and Wuhu Xinshi Xinhong intends to increase its capital by 500 million yuan.

"The landing of this round of financing is conducive to enhancing Changan's new energy development capabilities, and the company's IPO on the science and technology innovation board is under discussion." Some industry insiders close to Chang'an New Energy told the Financial Associated Press reporter.

At the same time, Avita Technology, a high-end brand jointly built by Changan Automobile, Huawei and CATL, will also open a round of financing in 2022 and seek independent listing in the future. In the first round of financing, Avita achieved its goal of introducing strategic and local industrial investors, and received a total financing amount of 2.42 billion yuan.

Also introducing social capital are GAC Aean and SAIC Zhiji. According to Feng Xingya, general manager of GAC Group, "GAC Aean will fully complete the mixed ownership reform in 2022 and choose the opportunity to go public"; Liu Tao, co-CEO of Zhiji Automobile, also made it clear that he has a very complete consideration of the listing, and there will be a round of financing plans for the A, B and C rounds in the follow-up; An Conghui, CEO of Geely's high-end intelligent electric brand Extreme Kr Automobile, said that There will be multiple rounds of financing until the IPO is realized.

It is worth mentioning that in order to fiercely manage the team, equity incentives for core employees have also become a common choice for traditional car companies. According to lantu automobile's equity incentive plan, core employees hold more than 10% of the shares; GAC Aeon is also further promoting employee shareholding.

In the view of industry insiders, in the past few years, a large number of industry talents have flowed into the new car team, while traditional car companies are in a state of "blood loss", and the original intention of the equity incentive system design is to retain talents for enterprises and form a community of interests.

The new forces have changed from science and technology to Hong Kong stocks

Compared with traditional car companies, the new car-making forces are more eager for funds. Before there was the dual listing of Xiaopeng and Ideal in the US stock market and Hong Kong stocks, and then there was the return of WM Automobile in the science and technology innovation board, so that the new car-making forces "waist" enterprises that had intended to break into the science and technology innovation board began to reconsider financing channels.

It is not only Huaren Express that intends to go public in Hong Kong, but also Nezha Automobile, WM Automobile and Zero Run Automobile are all rumored to be going to Hong Kong for IPO in 2021. "WM has begun to prepare a prospectus for an (IPO in Hong Kong)." Some insiders revealed to the Reporter of the Financial Associated Press.

In fact, before the IPO, the financing of the above-mentioned car companies in the primary market was already quite active.

In October 2021, Nezha Automobile announced the completion of a D1 round of financing totaling 4 billion yuan, of which 360 Group led the investment of 2 billion yuan; in November, Nezha Automobile once again released the news that CATL would participate in the company's D2 round of financing and become a strategic investor. In October of the same year, WM launched a D1 round of financing with a financing scale of more than US$300 million, led by PCCW and Shun Tak Group; in December, WM officially announced the completion of the D2 round of financing of US$152 million, and Agile group listed on the Stock Exchange in 2005 led another US$140 million investment.

In addition, ZeroCar also completed two rounds of financing in 2021, with a total financing of more than 8.8 billion yuan, while another new car manufacturer, Aiways Automobile, announced on January 3, 2022, that it had completed a new round of financing of hundreds of millions of dollars.

In order to gain market recognition, financing and success will bring enterprises into the IPO track, becoming the driving force for new forces to survive in the market competition.

"The development of enterprises requires a lot of money, and to say that we are not short of money is false, that is, those that have now been listed and raised money also need to be refinanced." Daniel Zhang, CEO of Nezha Automobile, said on the company's IPO, "The more money the better for the company, and we hope that Nezha can raise more funds." ”

In the view of Cao He, president of Allianz Investment Management (Beijing) Company, the ultimate goal of all new car-making forces relying on financing models is IPO. "There are very few opportunities left for unlisted companies in several other securities markets. At the same time, Hong Kong stocks have also left a channel for domestic investors to go south. Cao He said.

Is it "after the wave" or "liar"

Just when the new car-making forces have just begun to gain a foothold in the market, a wave of "back waves" has rushed into the automotive industry. Around the end of 2021, 5 companies announced their entry into the vehicle field and opened their own "car-making business".

On January 12, Niu Innovative Energy Technology, founded by Li Yinan, founder of Xiaoniu Electric, was officially unveiled, and released its first model, the Youjia NV, which is scheduled to start delivery in September this year.

According to the news of Niuchuang, it has obtained $500 million in financing from world-renowned institutions such as IDG and COATUE in the Series A financing. Li Yinan joked about this, "Since its inception, there has not been a day since the Youjia family has been short of money."

Also founded by industry veteran Su Weiming, former executive vice president of Volkswagen Group, Binli Motors also earned enough eyeballs before the new car was released. According to public information, Pennsylvania was established on June 11, 2021, with a registered capital of up to US$200 million.

Earlier, in the light orange era unveiled at the Guangzhou Auto Show, it is expected to be launched in July 2022 and delivered at the same time, when the car will be oem by BAIC Ruixiang (formerly BAIC Yinxiang); in addition, focusing on building a box car suitable for travel tools in the B-end market, the first mass-produced model BM-400 is expected to be mass-produced in 2024.

If the first four companies have not yet risen in the industry too much, then the next fifth company after announcing "participation in the war", even if it has caused the previous generation of new car-making forces to criticize. On January 5, the domestic automobile trading platform Tuanche.com, which is listed on the US stock market, announced the construction of cars on Weibo and "named" the new car-making force "Wei Xiaoli".

"The funds used for the mass production of a car are a fraction of the new forces that make cars, Niu Chuang got 500 million US dollars, and tuan che may be one-tenth of them, that is, 50 million US dollars." Wen Wei, CEO of Tuanche, revealed that Tuanche's car-making cycle is 18-24 months, and the first model is expected to be listed and sold this year, with a pricing range of 100,000-200,000 yuan.

This remark caused the ideal car CEO Li Xiang to shell. "Only through rhythmic and patient long-term growth can we succeed, and entrepreneurs who expect to find a super savior will generally find liars or most likely scammers themselves." Li wants to directly accuse the group car of building a "scam" as a "person who came over".

"It is still difficult to judge the prospects of the 'back waves', especially the need for major breakthroughs in new technologies, new forms and new materials." Cao He told reporters that if it is only a copy of the existing technical route, the "back wave" is "difficult to maintain".