Introduction: Xiaopeng Automobile has become the first "new car-making force" to be included in the Hong Kong Stock Connect, and the trend of its future stock price has a very large reference value for other latecomers.
On February 9, 2022, Xiaopeng Motors announced that it will be included in the Hong Kong Stock Connect from now on. On the same day, the opening price of Xiaopeng Automobile's H shares reached 150 Hong Kong dollars per share, up more than 6% from the closing price on February 8, and rushed to 157.5 Hong Kong dollars per share, and closed at 152.5 Hong Kong dollars per share, an increase of 8% in a single day. On the 10th, Xiaopeng Automobile continued to rise 3.08% to close at HK$157.2 per share.
For the first "new car-making force" car company to be included in the Hong Kong Stock Connect, the capital market has made a positive response. This is actually not difficult to understand, as Xiaopeng Motors said in the announcement, after the inclusion of the Hong Kong Stock Connect, its own brand awareness can be greatly improved and get more market attention.
1 "Gold Absorption" New Ways?
More importantly, mainland investors can henceforth entrust mainland securities companies to declare to the Hong Kong Stock Exchange to buy and sell Shares of Xiaopeng Motors listed on the Hong Kong Stock Exchange. This undoubtedly facilitates the investment of mainland investors in Xiaopeng Automobile, and also means that the liquidity of Xiaopeng Automobile's Hong Kong stocks has been strengthened.
Although the increase in the liquidity of the company's stock is a good thing, it is not the same as the increase in the valuation of the stock. If from the perspective of value analysis, the inclusion of the Hong Kong Stock Connect itself only expands the scope of secondary market channels for stock trading, which may not be of much help to enhance the intrinsic value of the company.
Let's first look at the performance of China's new energy vehicle market: total sales in 2021 reached 3.521 million units, ranking first in the world, an increase of nearly 160% year-on-year; the share of new energy vehicles in the domestic market also increased to 13.4%.
As far as the three "new car-making forces" in the first echelon are concerned, the sales of WEILAI, Ideal and Xiaopeng will be 91,400, 90,500 and 98,100 units in 2021, respectively, an increase of 109%, 177% and 263% year-on-year. Whether at the macro level or the micro level, the performance of the new car-making forces in 2021 is outstanding.
Correspondingly, due to the review of the listing of Chinese stocks in the United States and the increase in the rules and regulations of the United States for Chinese stocks, Weilai, Ideal Automobile, and Xiaopeng Automobile did not perform as well as their sales in 2021.
Among them, the stock price of Weilai US stocks did not rise but fell, falling by 35% compared with the closing price at the end of 2020, and the market value decreased by 165.9 billion yuan. Xiaopeng Motors and Ideal Automobile also did not achieve stock price growth that matched their sales. Among them, Xiaopeng Automobile's Hong Kong stocks increased by 12.91% and US stocks by 17.51%; the growth rate of Ideal Automobile Hong Kong stocks was only 4.87%, and the growth rate of US stocks was 11.34%. Entering 2022, although the US stock prices of these three companies have begun to recover since February this year, they still have not filled the big hole dug by the January decline.
From the perspective of corporate financial performance, although the gross profit margins of these three "new car-making forces" are not low, the high research and development expenses and marketing expenses make the net profits of these three car companies easily negative. Various large investments make the financial statements of these three car manufacturers not look good.
Specifically, Xiaopeng Automobile's total operating income in the first three quarters of 2021 was 12.432 billion yuan; the cumulative net profit in the first three quarters of 2021 was -3.576 billion yuan; and on September 30, 2021, the cash and cash equivalents and short-term investments on Xiaopeng Automobile's account were 41.988 billion yuan. As of September 30, 2021, Xiaopeng Automobile has lost nearly 11.4 billion yuan.
Ideal Auto's total operating income in the first three quarters of 2021 was 16.389 billion yuan; its net profit in the first three quarters of 2021 was -617.5 million yuan; as of September 30, 2021, its cash and cash equivalents and short-term investments were 46.945 billion yuan; and the cumulative loss since the listing of US stocks exceeded 4.7 billion yuan.
NIO's total operating income in the first three quarters of 2021 was 26.235 billion yuan; its net profit in the first three quarters of 2021 was -1.872 billion yuan; as of September 30, 2021, its cash and cash equivalents and short-term investments totaled 43.301 billion yuan; and its cumulative loss since its listing on the US stock market exceeded 33.1 billion yuan. That is to say, these three new car-making forces do not yet have their own hematopoietic ability, and completely rely on external financing and investment to maintain the survival and development of enterprises.
2 Follow the example of latecomers?
Considering that the state's subsidy policy for new energy vehicles is about to expire; traditional car companies and technology giants are crowding into the new energy vehicle track; and the ultra-high research and development costs required for the rapid iteration of smart cars, the demand for funds from "new car-making forces" will certainly become increasing.
Although the new forces of head car manufacturing have raised a lot of money in the first two years, for other new forces that have not yet been listed, the lack of funds means that enterprises have to raise funds externally. Therefore, Xiaopeng Automobile took the lead in being included in the Hong Kong Stock Connect, which has a reference and demonstration effect on other new forces.
After all, due to the strict conditions of domestic IPOs, it is not easy to land on A shares, and many car companies have given up before, including many state-owned automobile groups; and listing in the United States requires strict review at all levels, and a wave of market driven by Tesla has long been a thing of the past. Therefore, listing in the United States may no longer be the first choice, and there is Hong Kong at the doorstep as one of the international financial centers, both a large amount of mainland capital attracted by the Hong Kong Stock Connect, as well as the original overseas capital, which is likely to become a financing channel for latecomers such as Nezha Automobile and Zero-Run Automobile.
After the inclusion of the Hong Kong Stock Connect, stocks can be traded on a broader secondary market. As Gu Hongdi, president of Xiaopeng Motors, said, "In the long run, it is helpful for a person like Xiaopeng Automobile to establish contacts (for the company) with the domestic capital market and domestic investors." ”
The key consumer groups of the major new car-making forces represented by Xiaopeng Motors are in the mainland, and mainland capital may be more familiar with Xiaopeng Motors. With the support of the country's determination to achieve "carbon peak" and "carbon neutrality", mainland capital may choose car companies like Xiaopeng Automobile for investment, after all, there is indeed a lack of such new forces in the current A-share market. If the new car-making forces are really recognized by mainland capital, it will undoubtedly help the emerging Chinese new energy automobile companies to go further on the new energy vehicle track.