On the morning of March 10, 2022, NIO (09866. HK, NIO. US) happy to open the door and return to the Hong Kong Stock Exchange (00388. HK) just happened to usher in a rebound in global stock markets, and it rushed to HK$169.50 at the opening of the market, 5.94% higher than the opening price. However, in the afternoon, it began to fall, once as low as HK$158.80, and the stock price closed at HK$158.90 on the first day, with a market value of HK$268.9 billion.
On the trading day before the listing of Hong Kong stocks, NIO's U.S. stock closed at $20.17, equivalent to Hong Kong stocks of HK$157.60, so compared with the next day's U.S. stock prices, NIO's H shares actually rose by 0.82%, almost the same as the overnight U.S. stock closing price.
Relatively speaking, the stock price of Xiaopeng Automobile (09868.HK, XPEV.US), which returned to H-shares on July 7, 2021, was flat on the first day, while the cumulative decline since its listing was 33.39%; the ideal of returning to Hong Kong on August 12, 2021 (02015. HK, LI.US), the share price fell slightly by 0.85% on the first day of listing, and has fallen by 9.49% since listing.
The stock price performance is so poor, the new forces are going to be "cool"?
High oil prices are good for the development of new energy
Remember last October, when the UK was in an oil shortage, the C Luo luxury car queued for 7 hours and returned empty-handed? In the second half of last year, because of supply chain problems, the news of the British people snapping up fuel was overshadowed, if it was a warm-up at that time, then the recent surge in oil prices may make more consumers more determined to focus on new energy.
Affected by the geopolitical situation, oil prices have recently broken through the high of 100 yuan, hitting a new high in nearly eight years, and WTI crude oil prices have reached an eleven-year high, see the chart below.
Commodity price volatility is determined by short-term supply and demand, and the sharp rise in oil prices due to changes in the situation is highlighting the dependence of countries and global consumers on fossil energy. In the face of high oil prices, the demand for electric vehicles or mixed oil vehicles has increased in the number of consumers in various countries and around the world to replace fossil fuels with new energy sources.
According to the expectations of European banks, the pricing of electric vehicles is currently more determined by the supply side than by demand, because the delivery period of electric vehicles may be repeatedly delayed due to the shortage of chips, the price of raw materials (such as nickel) and the sharp rise in the price of accessories.
As Musk, the owner of TSLA.US, said: The problem we face now is not orders, but capacity.
The author believes that the increased cost of lack of core and soaring prices of raw materials and accessories may not be borne by electric vehicle manufacturers, and in the current imbalance between supply and demand, more popular brands may have the ability to pass on the increased costs to end consumers. Therefore, the overall market environment should be favorable for new energy vehicle manufacturers.
This may add another light to the bright prospects of weilai, ideals and xiaopeng, the new car-making forces that have broken through the siege in the mainland market.
Weilai lost the new forces
Weilai's performance last year was a bit behind, and it was easily caught up by ideals and Xiaopeng, mainly because it did not push a new car, see the figure below.
Both Xiaopeng and Ideal achieved the delivery of newly launched models in 2021.
Xiaopeng delivered the P7 Wings Edition and G3 and P7 models with lithium iron phosphate batteries in March 2021 and the P5 and G3i models in September 2021.
Following the delivery of the Ideal ONE in the 4th quarter of 2019, ideal delivered the Ideal ONE in June 2021 in June 2021 after a gap of one year.
In 2021, Xiaopeng became the leading big brother of the "new forces", and the gap between Ideal and NIO was further narrowed, and by the first two months of 2022, Ideal went further, leading Xiaopeng (19,100 units) and NIO (15,800 units) with deliveries of 20,700 units.
NIO's "Future"
2022 should be a year of great leap forward for new energy vehicles. The rise in oil prices is the most convincing advertising campaign for new energy vehicles.
On the other hand, China, the world's fastest growing new energy vehicle market, issued a notice on the last day of 2021 that the new energy country will make up for the 30% decline, and clarify that the subsidy policy for the purchase of new energy vehicles will be terminated on December 31, 2022, and the vehicles on the plate after this will no longer be subsidized.
However, at this year's important meeting, the delegates put forward a number of suggestions on the new energy subsidy decline policy, including delaying subsidies for one to two years and boosting automobile consumption.
Regardless of the follow-up of the subsidy policy, new energy vehicle manufacturers have collectively started a tide of price increases, and Tesla, Weilai and Xiaopeng have raised prices for their models.
In view of the termination of the subsidy policy at the end of this year, this may push consumers to buy cars before the end of the subsidy, which means that the sales performance of new energy vehicles in 2022 should be good, only in the supply chain and lack of core dilemma, whether manufacturers can deliver on schedule under the dilemma of supply chain and lack of core.
Even so, new car releases cannot be left behind. NIO, Ideal and Xiaopeng will all release blockbuster new cars this year.
New car plans for new forces
NIO's medium- and large-scale smart electric flagship sedan ET7 will be delivered from March 28, and has been ordered for test drives. At the beginning of this year, NIO adjusted its production line to prepare for the delivery of ET7. In addition, the mid-size intelligent electric coupe ET5 will also be delivered from September 2022.
In addition, the company has been expanding the setup of its charging, sales and service network. As of January 31, 2022, NIO has built 836 substations, 3,766 charging stations and 3,656 destination charging stations in China, and has opened 42 NIO centers ("Niuwu"), 341 NIO Spaces, 55 NIO service centers and 180 authorized service centers.
In November 2021, Xiaopeng launched its fourth production model, the G9, and its first production model that incorporates self-developed technology, and will begin deliveries in the third quarter of 2022.
At present, it is mainly engaged in the ideal of extended range electric vehicles, planning to launch a full-size smart luxury electric SUV in 2022, and said that it will launch at least two ultra-fast charging pure electric vehicles per year from 2023.
As of February 28, 2022, Ideal had 220 retail stores and 279 service centers in 105 cities, operating Ideal Car Licensing Stores and Painting Shops in 204 cities.
With new cars in hand, can the production capacity of new forces keep up?
NIO is currently producing vehicles at its Hefei plant through a strategic partnership with JAC Motor, which has an annual vehicle and component production capacity of 120,000 units and will expand to 240,000 units in the first half of 2022. In addition, NIO is building a second production plant in the Hefei Xinqiao Intelligent Electric Vehicle Industrial Park, which is expected to start production in the third quarter of 2022, with a planned production capacity of 1 million vehicles per year, which will far exceed Tesla's Shanghai gigafactory.
Xiaopeng's production capacity facilities mainly include 150,000 units of Haima Plant with contracted production arrangements and 100,000 units of Zhaoqing's own plant. Xiaopeng and Guangzhou Kaide Investment reached a cooperation agreement, the latter will be in accordance with Xiaopeng's requirements to build a smart electric vehicle production base, planned to be put into operation in December 2022, the production capacity may be 100,000 vehicles; Xiaopeng also signed a cooperation agreement with Wuhan City to build an electric vehicle production base with an annual production capacity of 100,000 vehicles; in addition, Xiaopeng will carry out the second phase of the Expansion Project of Zhaoqing Plant, after completion, the production capacity of Zhaoqing Plant will be doubled to 200,000 vehicles.
From this estimate, the author speculates that excluding the Haima factory, Xiaopeng's own production capacity may reach 400,000 vehicles.
Ideal exists in Changzhou and Beijing two production bases: Changzhou is a self-built plant, the annual production capacity of 100,000 vehicles, is currently undergoing capacity upgrade, will be upgraded to 200,000 vehicles in 2022; Beijing is the ideal car to take over the Beijing Hyundai plant, the total investment of the project or up to 6 billion yuan, is expected to be put into operation in September 2023, after the commissioning of the next phase of annual production capacity or reach 100,000 vehicles.
In addition, ideally signed a strategic cooperation framework agreement with the Chongqing Municipal Government in December 2021 to build a Chongqing manufacturing base in Liangjiang New Area, with an annual production capacity of 200,000 units.
Based on this estimate, the ideal annual production capacity is expected to reach more than 500,000 vehicles.
From the expansion of production capacity to the research and development of the industrial chain (from batteries to software to unmanned driving technology), all aspects are inseparable from the investment of funds, how can the financing ability of the new forces be? From their successful simultaneous listing of Hong Kong stocks and US stocks, it can be seen that in the current new energy vehicle investment boom, new forces still have a certain influence in the capital market.
At present, WEILai, Ideal and Xiaopeng have not yet achieved breakeven, and generally use the price-to-sales ratio for valuation calculation. However, due to their relatively low vehicle delivery base, capacity expansion has greatly accelerated deliveries and sales growth has been very rapid, which is why the market has given them a high market-to-sales ratio, as shown in the table below.
However, other new forces are also in the process, such as Nezha Automobile's parent company, United Automobile, or the intention to IPO on the Hong Kong Stock Exchange, Guangzhou Automobile Group (601238. SH, 02238.HK) is also rumored to spin off the electric vehicle business GAC Aean listing... The gradual rise of new energy vehicles in the capital market may form a reasonable valuation pricing, which should be a good thing for investors.
Judging from the above table, Nio's price-to-sales ratio is relatively low, or reflects its low performance in 2021, with the delivery of new cars by the three new forces in 2022, their price-to-sales ratio valuation or re-ranking. NIO's lower price-to-sales rate may provide a larger room for improvement.
Author: Mao Ting