"Car Circle Layer" Peng Baoxuan
Edited by Ge Fanmei
On the eve of the Spring Festival, Chongqing Changan New Energy Automobile Technology Co., Ltd. (hereinafter referred to as "Changan New Energy") held a B round financing signing ceremony on January 24, 2022, announcing the completion of 4.977 billion yuan of financing. At the same time, its original controlling shareholder, Chongqing Changan Automobile Co., Ltd. (hereinafter referred to as "Changan Automobile", 000625.SZ), was gradually diluted by its original 100% shareholding in Changan New Energy.
As the bearer of Changan Automobile's new energy vehicle business, Changan New Energy's sales in 2021 increased significantly, mainly from the sales of The Ben series of models. However, the Hongguang MINI with a similar price range became a hit in 2021, with annual sales of 395,500 units. By comparison, the Ben series sold 76,400 units, which is not surprising.
In addition, Changan New Energy announced at the B round financing signing ceremony that it will reach 1.05 million vehicle sales in 2025, and the current sales volume is not small.
Nearly 5 billion yuan of Series B financing
Changan New Energy's Series B financing amount came from 10 investment institutions, including Changan Automobile, Jianxin Investment, CICC Capital, etc. Among them, Changan Automobile is the largest shareholder of Changan New Energy, and intends to increase its capital by 1.36 billion yuan in this round of financing. At the same time, it also introduced an employee shareholding platform, increasing the capital by 117 million yuan and holding 0.9% of the shares.
After the completion of the capital increase, the shareholding ratio of the top four shareholders of Changan New Energy has been diluted to a certain extent. Changan Automobile's shareholding ratio was diluted from 48.95% to 40.66%, Chongqing Changxin Equity Investment Fund Partnership (Limited Partnership) and Nanjing Runke Industrial Investment Co., Ltd. were both diluted from 17.97% to 11.08%, and Chongqing Liangjiang New Area as Equity Investment Fund Partnership (Limited Partnership) was diluted from 13.3% to 8.2%.
Changan New Energy has always been sought after by capital, but the previous financing progress has not been smooth. Changan New Energy was publicly listed on the Shanghai United Assets and Equity Exchange in October 2018 to introduce investors, but terminated the listing and capital increase in June 2019.
Three months later, Changan New Energy was listed again in September 2019, and completed a series A financing in December 2019 with a financing amount of 2.84 billion yuan, and the investment institutions include Liangjiang Fund, Nanjing Runke, and Southern Industrial Fund.
However, after the A round of financing, Changan Automobile lost control of Changan New Energy. Changan Automobile's shareholding ratio dropped from 100% to 48.95%, and Changan New Energy changed from its original status as a wholly-owned subsidiary of Changan Automobile to an associated company.
At the same time, on the business side, Changan New Energy is no longer the only participant in Changan Automobile's new energy vehicle business. Avita Technology (Chongqing) Co., Ltd. (hereinafter referred to as "Avita"), a shareholding company of Changan Automobile, aggregates the resources of Changan Automobile, Huawei and CATL Times, and is a high-end intelligent electric vehicle brand jointly created by various resources.
Coincidentally, Changan Automobile's shareholding in Avita has also been greatly diluted. On November 6, 2021, Avita increased its capital and shares by 2.42 billion yuan, including Changan Automobile and CATL. After that, Changan Automobile's shareholding in Avita was diluted to 39.02%, and CATL became the second largest shareholder of Avita, holding 23.99%.
Changan New Energy and Avita both operate in the new energy vehicle business, but Changan Automobile denies the correlation between the two. Changan Automobile said in the announcement of the research activities that Avita is not a company under Changan New Energy, the two operate independently, have different product brands and product segments, and provide products and services for customers in different market segments. As of the first three quarters of 2021, Avita has not achieved operating income.
Sales exceed one million units in 2025
Compared with Avita, which started later, Changan New Energy's operating income is considerable, but its net profit has aggravated losses. In the first three quarters of 2020 and 2021, Changan New Energy's operating income was 2.272 billion yuan and 3.454 billion yuan, and its net profit was -1.227 billion yuan and -1.595 billion yuan, respectively.
According to the statistics of the Association, Changan Automobile ranked 12th in the retail sales list of new energy manufacturers in 2021, achieving 76,466 units, an increase of 319.3% year-on-year. However, compared with Changan Automobile's annual sales of 1.1933 million passenger cars, the sales of new energy models accounted for only 6.41%.
At present, the official website of Changan New Energy shows that the models are Ben E-Star, CS15 E-Pro, Yidong EV460 and CS55 pure electric version, and the price ranges from 29,800 yuan to 200,900 yuan. The maximum outputs are 55 kW, 120 kW, 100 kW and 160 kW, and the NEDC operating ranges are 301 km, 401 km, 405 km and 605 km, respectively.
Figure: Changan New Energy models on sale
Source: Company website
From the perspective of sales, the Ben series still carries the banner. The Ben series ranked 6th in the 2021 new energy car retail ranking, achieving 76,381 units, accounting for 99.89% of Changan Automobile's annual sales of 76,466 new energy models, an increase of 582.7% year-on-year.
In fact, the price positioning within 100,000 yuan is one of the reasons for the substantial increase in sales of the Benben series, but its sales are still inferior to the Hongguang MINI, which also plays a "price war". In 2021, Hongguang MINI achieved sales of 395451 units, an increase of 250.7% year-on-year, ranking first in the retail ranking of new energy cars.
Behind the sharp increase in car sales of Changan New Energy, the difficulty of picking up cars has become a common problem reflected by customers. According to the black cat complaint platform, many customers mentioned that Changan New Energy did not deliver the car on time, the delivery time was extended, and the wait was indefinite.
Figure: Customers report a delivery problem with the Pebble model
Source: Black Cat Complaint Network
Among them, the lack of core and lack of electricity is part of the reason. On December 4, 2021, Changan New Energy issued the "Notice on Further Strengthening the Communication and Delivery of Orders Received by BenBen E-Star Car Series", which shows that the company does have problems with lack of core and less power, and second, due to the large backlog of orders in the Ben E-Star car series, in order to avoid longer delivery waiting times, it stops accepting orders.
At the signing ceremony of the B round of financing, Changan Automobile once again set up sales targets for new energy products. Changan Automobile plans to reach 3 million units by 2025, of which new energy products account for 35% and about 1.05 million vehicles.
Previously, Changan Automobile launched the "Shangri-La Plan" in 2017, in which it announced that it would completely stop selling fuel vehicles in the traditional sense in 2025 and realize the electrification of all products. And by 2025, it will invest 100 billion yuan in the whole industry chain and launch 21 new pure electric vehicle products.
In the market as a whole, Changan New Energy's million sales target does highlight its ambitions in the field of new energy. According to the forecast of the China Automobile Association, the sales of new energy vehicles in China are expected to exceed 6 million in 2025, accounting for about 20% of the total sales of the automobile market. This means that Changan New Energy occupies at least 16% of the market.
Only at present, Changan New Energy occupies only 2.3% of the market share in 2021, and the sales of 76,500 new energy vehicles are still far from the sales target of 1.05 million units in 2025, doubling 13 times in four years, and there is still a long way to go.