Written by / Han Ling
Edited / Mao Shiyang
After the listing of Hong Kong stocks, Weilai's US stocks picked up
On March 10, NIO officially completed its listing on the Hong Kong Stock Exchange through the introduction method and began to list for trading. On the first day, the opening price was HK$160 per share, and the highest rose to HK$169 per share, and the total market value exceeded HK$270 billion. However, as of today's close, the stock price was reported at HK$158.9, with a total market capitalization of HK$265.2 billion, a slight decline year-on-year.
Today, the three "Wei Xiaoli" companies have finally gathered on the Hong Kong Stock Exchange to complete the listing. At the beginning, WEILAI was the first of the three to realize the listing of US stocks, and successfully rang the bell on the New York Stock Exchange in September 2018, thus becoming the first stock listed by China's new car-making forces. Later, Xiaopeng and Ideal were "re-listed" on the Hong Kong Stock Exchange, but Weilai was slow to move.
In the previous announcement, Weilai said that the purpose of the listing is to provide alternative trading locations for corporate investors, mitigate geopolitical risks, and expand the investor base. At the same time, the listing of the two places will help introduce more investors, which is beneficial to the long-term development of the company.
However, Weilai's way of introducing the listing has also been interpreted by the outside world as a "forced choice". In fact, it is possible to quickly land on Hong Kong stocks through the method of "introducing listing", but at the cost of not offering new shares, so it is temporarily impossible to obtain new financing. In contrast, Xiaopeng Motors raised HK$14 billion when it was listed in Hong Kong in July 2021, and Ideal Automobile raised HK$11.8 billion when it was listed in Hong Kong in August of the same year.
Many media reported that the reason why WEIlai has done this is because the problem of user trust funds has not been completely solved, so in order to gain the initiative in the capital market, it may be listed first and then raised.
It is worth noting that NIO has also submitted an application for listing to the main board of the Singapore Stock Exchange, and the specific date is under review. If it goes well, WEILAI is expected to become the first new car manufacturer listed in the three places in China.
Weilai said in the announcement that "this listing is not financing, and there are sufficient funds at present". However, in the eyes of industry insiders, the layout of listing in many places still confirms Weilai's desire to expand its sources of funds. According to the news, after the listing in Hong Kong, WEIO will also seek to list in Singapore.
In fact, in the face of the uncertainty of the competitive landscape, WEILAI's capital needs are still obvious.
According to the financial report data, as of September 30, 2021, NIO's cash reserves totaled about 47 billion yuan. Correspondingly, at the end of 2021, the number of employees in NIO has exceeded 15,000, an increase of 95.9% compared with 2020. In terms of research and development, WEILAI's R&D expenditure in the third quarter was 1.19 billion yuan, an increase of 35.0% from the previous quarter, and the cumulative investment in R&D expenditure in the first three quarters exceeded 2.7 billion yuan, and it is expected to invest 5 billion yuan in research and development throughout the year.
Not only that, Weilai's cumulative net loss in the past four years has reached 28.1 billion yuan. In the first three quarters of 2021, NIO's marketing, sales and management expenses have reached 4.5 billion yuan. In comparison, the marketing, sales and management expenses for the ideal year of 2020 were 1.119 billion yuan, and Xiaopeng was 2.921 billion yuan.
The upfront research and development cost of new energy vehicles is very high, and the profit cycle is relatively long, and there is a continuous demand for funds. For a long time, the new forces of car manufacturing are actively financing, through various channels to raise more funds, Weilai is naturally no exception, only to get more funds, in order to meet the needs of technology development and sales network expansion.
Since November last year, NIO's performance in the US stock market has begun to decline, from the highest $44.27 / share to $21.77 / share, the stock price is close to the waist, the market value evaporated nearly 38 billion US dollars.
After Weilai was officially listed on the Hong Kong stock market today, the US stock price opened at 18 US dollars / share, the highest 20.55 US dollars / share, an increase of 12%, to a certain extent, showing the capital market's attention to Weilai's listing in Hong Kong.
Investors are waiting for Weilai's sales to pick up
In the eyes of some investors, Weilai's poor sales performance for several consecutive months is the reason for its poor stock price performance.
On March 1, Weilai released sales data, and the delivery volume in February was 6131 units, an increase of 9.9% year-on-year, but compared with 9652 units in January, it was still a lot lower. Compared with other new car-making forces, Ideal delivered 8414 vehicles in February, Xiaopeng 6225 vehicles, and Nezha 7117 vehicles, all higher than Weilai.
In response to the decline in sales in February, Li Bin, chairman and CEO of WEILAI, responded that the delay in resuming work of the vehicle management office and related units, as well as the home anti-epidemic of most residents, have limited the delivery schedule. Li Bin said the factory resumed work since mid-February and began to climb production capacity.
In fact, NIO's challenge in sales volume has been revealed last year. In July last year, Xiaopeng and Ideal surpassed Weilai for the first time, "Wei Xiaoli" became "Xiaoli Wei", after that, Weilai was in a state of decline in the first-line new car-making forces for many months, and even in the sales ranking in January this year, Weilai was also surpassed by the second echelon of Nezha, ranking out of the top ten, only ranked twelfth.
In the eyes of industry insiders, the decline in Weilai's sales volume is also related to its ongoing production line transformation and supply chain management.
"The ES8, ES6, EC6, ET7 and ET5 each use a large number of parts sourced from suppliers, many of which are currently single-source suppliers to these components, as well as any vehicle components we expect to produce in the future." Nio said that there is currently no qualified alternative source for single components used in the supply chain.
Qin Lihong, co-founder of Weilai Automobile, also verified this statement. When asked about the 2022 sales target, Weilai did not give a specific number, "This year's delivery target is decided by the supply chain, this year's production capacity will be improved, and how much can be produced will be delivered." Qin Lihong pointed out that the first new factory in weilai industrial park will be put into operation within this year, and the production capacity is expected to be greatly improved.
In the view of some industry insiders, the decline in sales of Weilai is related to its product cycle, and several of the previous main sales models are in the cycle of upgrading, which has intensified the consumer wait-and-see mood to a certain extent.
In fact, NIO has begun to make efforts in new products. In terms of product planning, this year, WEILAI will also launch three products of ET7, ET5 and ES7 to further enrich its product matrix. In addition, WEIO has also maintained high infrastructure investment this year. In the storefront, NIO will open more than 100 Nio Houses and Nio Space in 2022; in terms of substations, by the end of this year, the cumulative number of NIO substations will exceed 1300, which means that on the basis of more than 770 at the end of last year, nearly 600 more will be built.
In this context, investors expect NIO's new car to have a stable market performance, thus supporting the recovery of NIO's US stock prices and Hong Kong stock prices.
The industry believes that in addition to the impact of the supply chain, Weilai's high-end positioning also limits sales. At present, NIO's ES8, ES6 and EC6 models have a starting price of more than 350,000 yuan. In contrast, Xiaopeng and Nezha have products of less than 200,000 yuan. Therefore, in the new car track where investors pay more attention to sales ranking, the price range of Weilai is considered to be somewhat disadvantaged.
The countermeasure given by Weilai is to continue to increase investment in high-end brands on the one hand, and on the other hand, it will also launch some low-end brands.
In February this year, NIO released the ES7, benchmarking BMW X5L, which is another new car after ET5 benchmarking BMW 3 Series and WEIO ET7 benchmarking BMW 7 Series, which will be delivered within this year. NIO's ambition to replace BMW in the luxury car market is fully revealed. Li Bin has publicly proposed that he hopes to change the pattern of the luxury car market from "BBA" (BMW, Mercedes-Benz, Audi) to "NBA", of which N refers to Weilai Automobile.
Qin Lihong said that Weilai still has a foothold in the high-end pure electricity. The data shows that in 2021, among the high-end new energy electric vehicles of more than 300,000 yuan, The share of Weilai accounted for 40.7%, and Tesla ranked behind Weilai. At the same time, in the top ten sales list of high-end pure electric passenger cars with an average price of more than 300,000 yuan in January 2022, WEIO ES6, EC6 and ES8 are all on the list.
Last year, Weilai said it would launch a new model, the Gemini Gemini, which will be used as a volume model with an annual output of 60,000 units, which means that monthly sales will reach 5,000. However, Li Bin also admitted that the NIO brand will not release too cheap models, lower-priced products will be undertaken by the new brand, and NIO will enter the mass market through the new brand.
If Weilai wants to achieve revenue of 100 billion yuan, it means that the annual sales volume will exceed 400,000 vehicles, and there is still a long way to go.