Text | Financial Street Old Lee
Weilai Automobile landed on the Hong Kong Stock Exchange, confirming a sentence that the capital market is always the brave first.
Yesterday, NIO officially landed on the Hong Kong Stock Exchange, the stock code "9866", the first day of the opening of the report of 160 Hong Kong dollars per share, the Hong Kong stock market value of 267.041 billion Hong Kong dollars. Just as the width of the NIO ET7 "1987" implies a special meaning, the Hong Kong stock code "9866" is just composed of the suffixes of the first four models of NIO - EP9, ES8, ES6, EC6.
Following the US stock market, the three giants of China's new car manufacturing forces finally gathered on the Hong Kong Stock Exchange, compared to the ideal and Xiaopeng, Weilai Automobile's Hong Kong listing looks bright and beautiful, but in fact, there are many stories. In the past three months, the views of friends around Lao Li on Weilai Automobile are divided into two categories, one is extremely optimistic, one is relatively depressed, from a rational point of view, Lao Li believes that it is necessary to look at Weilai from a dual dimension, to see the conservative side from the perspective of industry, and also to see the optimistic side from the perspective of capital.
Today, Lao Li talked to you about what is the behind story of Weilai Automobile's Listing in Hong Kong? Why does NIO want to return to the era of fundamentals? What new stories will NIO's global layout bring?
The story of the return to Hong Kong stocks
Regarding the basic situation of WEILAI Automobile's return to Hong Kong stocks, industry colleagues have introduced a lot, and Lao Li only tells you about the special features of NIO's Hong Kong listing from the perspective of capital. In the media reports, everyone will see that Weilai Automobile landed on the Hong Kong Stock Exchange in the form of secondary listing or introduction to listing. Many friends asked, why did WEILAI return to the Hong Kong Stock Exchange in this way, and may also land on Singapore and the Science and Technology Innovation Board in the future? The answer is not complicated.
Like the return of Chinese stocks to Hong Kong in the past two years or so, NIO's return to Hong Kong is also for the safety of enterprises in the capital market. As we all know, Chinese stocks have not been given a fair financing environment in the US market, especially technology stocks are facing heavy supervision in the US market, and in the context of global geopolitics, expanding multiple financing channels is the most correct choice for enterprises.
Nio Auto currently only raises funds through the US market, once the North American market is in turmoil, the company's stock price will be very passive, while NIO can not price and raise funds in other markets, and it will be constrained in the capital market. After returning to the Hong Kong market or the future Singapore market, NIO will have multiple financing and pricing channels, which will greatly reduce the impact of north American market volatility on the company.
In fact, the road to Nio's return to Hong Kong is not easy, although NIO is the last company to land on the Hong Kong Stock Exchange among the three new car-making forces, but NIO's return to Hong Kong for listing was launched as early as a year ago. In March last year, NIO submitted a listing application to the Hong Kong Stock Exchange, but the tug-of-war between Weilai and Hong Kong for listing lasted for a year, mainly for the following three reasons:
First, the "NIO user trust shareholding problem" circulating in the market, Li Bin transferred 50 million shares of the company's shares to a NIO auto user trust fund in 2019, but Li Bin retained the voting rights to these stocks, if in accordance with the way of double listing on the Hong Kong Stock Exchange, there will be certain rule risks; second, weilai auto did not achieve annual profits at that time, and could not give dividends to investors within the specified time, which would lead to unreasonable pricing; third, the performance of Hong Kong stocks was too crotchy, three illusions in life, and the US stock market would fall. Hong Kong stocks will rise, and she likes me.
After a year of tug-of-war, NIO returned to Hong Kong by introducing the listing, compared with the dual listing of Ideal and Xiaopeng, the introduction of the listing approval process is faster and the approval caliber is more relaxed, while the rules of the Hong Kong Stock Exchange on the need to disclose transactions, related party transactions, share option plans, financial statement content and certain other ongoing obligations will not be used by NIO.
Lao Li believes that the smartest thing about Weilai is that this offering does not raise funds. Many media interpreted that Weilai Automobile did not raise funds this time because it was not bad money, and Lao Li discussed with many friends, which was not the reason. In 2021, Xiaopeng and Ideal will raise HK$14 billion and HK$11.8 billion respectively through the dual listing of Hong Kong, but according to the listing rules of the Hong Kong Stock Exchange, the introduction of listing in half a year can not use additional issuance, bond issuance and other ways to raise funds, so it is difficult to say that WEIlai Automobile does not raise funds.
Even if WEILAI Auto is double-listed, in the current situation of weak Hong Kong stocks and continuous shocks in the US market, NIO May encounter great pricing problems, and the market will not give an ideal valuation, which will directly affect its fundraising scale.
A return to the fundamentals of the times
The automotive industry is a typical technology, capital and talent-intensive industry, and although "Wei Xiaoli" has received the highest media attention, from the perspective of capital, they are not necessarily the best for future development. Earlier, the founders of the three giants of the new car-making force said that after the company was listed, it was only through the moment of life and death, and it was far from being strong, and it was indeed true from the perspective of enterprise development.
Friends familiar with the auto market will find that from the end of 2021, The launch speed and monthly sales of Weilai models have shown a certain decline, and the growth momentum of zero-run cars and Nezha cars is strong, and both cars have launched high-end models. In addition, from the perspective of the large market, the independent brands represented by GAC Aian and Great Wall Motors, and the joint venture brands represented by The North and South Volkswagen, have ranked among the top in the sales list in recent months.
It is difficult for the three strongest new forces to beat independent brands and joint venture brands from the perspective of product strength and cost performance, and with the development of the industry and enterprises entering a stable period, the valuation method of the capital market for automobile companies will return from the performance front to the fundamental era, and from the fundamental point of view, weilai automobile is facing a lot of pressure. Let's take a look at the sales trend of the new forces in the past three years:
In 2020, WEIO delivered 43,000 vehicles in the whole year, ranking first among the new car-making forces, while the second ideal car and the third Xiaopeng automobile sold only about 30,000 vehicles, and the price was lower than that of WEILAI;
In 2021, with the big sale of P7, Xiaopeng Automobile surpassed Weilai to become the first place in the sales of new forces, and Ideal Automobile achieved the sales results of Weilai's three cars with the ideal ONE car, and the gap between the two was only 1,000 units;
From January to February 2022, the sales data of Weilai Automobile is not so eye-catching, because ET7 and ET5 have not been delivered, the performance of SUVs is weak, and the sales of Weilai Automobile are not only thrown away by Xiaopeng and Ideal, but also surpassed by Nezha Automobile, and there are zero-running cars behind it.
From the perspective of the industry, the slowdown in sales is normal, but the perspective of the capital market is still narrow. In their view, ranking is not important, what is important is the sales growth rate and gross margin. From the financial report, Weilai Automobile's 2021 annual report has not yet been released, but from the third quarter report, all performance indicators are better than the same period of the previous year, and its main problem is that the sales growth rate and gross profit margin are facing the pressure of adjustment.
In terms of sales, before the launch of ET7 and ET5, WEILAI Automobile will face sales pressure that can be said to be considerable, not that Weilai Automobile's performance is not good, but that the market segment space of 350,000+ is indeed limited. As a brand at the top of the pyramid, the average price of NIO's external sales exceeds 400,000, which is basically at the same level as Mercedes-Benz E-Class, and in the field of electrification, this market is smaller, and NIO's performance in the past three years has been outstanding enough to seize a large number of core users. In 2021, the top three market share of China's high-end pure electric SUV are all NIO models, and the market share of the three models is more than 60%.
At the same time, the gross profit margin of Weilai Automobile is also facing greater trouble, of course, this is not only a problem to be solved by Weilai, many new forces are in a state of not making money.
Although the gross profit margin of WEILAI in 2021 is higher than that in 2020, in the first three quarters, WEILAI's gross profit margin has continued to decline, and it has been maintained at about 20%, frankly speaking, for auto companies priced at 400,000 levels, such a gross profit margin is not high. Weilai Automobile also said that the vehicle gross profit target for 2022 is 20%, and with the launch of NT2.0 products, the vehicle gross profit target will be further increased to 25%, but correspondingly, to achieve the target, the annual production capacity must be about 300,000 to achieve.
Will there be a new story in a global context?
However, according to the planning of NIO and the investment terms of the Hefei Municipal Government, NIO is likely to be listed in Singapore next, and by 2025, it is possible to land on the Science and Technology Innovation Board, if the above actions are completed, NIO will become the only auto company in China to IPO on 4 exchanges at the same time, which is definitely a pioneering move in the history of auto capital.
At the time of the release of the third quarterly report in 2021, WEIlai mentioned that the company had cash reserves of about 47 billion yuan at the end of the third quarter of 2021, and completed a financing of $2 billion in the fourth quarter of the same year. The company currently has sufficient cash reserves, no urgent financing needs in the short term, and in general, it is "not bad money". Many friends will ask why Weilai considers so many places to be listed in the case of not being bad at money, and Lao Li believes that there are the following reasons:
First, the U.S. market is not a completely fair market, for a domestic smart electric vehicle leading company like Weilai, listing on all continents of the world can really let investors in the world see themselves. As weilai said in the listing prospectus of this Hong Kong listing, Hong Kong listing can enhance the company's image in Hong Kong, promote investment by Hong Kong investors, enable the company to access the Hong Kong capital market, and benefit the company by reaching a wide range of private and institutional investors, which is crucial to the company's future growth and long-term development.
Second, Weilai Automobile is still facing certain capital market pressure, and listing is one of the best ways to promote the company's accelerated development. As mentioned in the listing prospectus, if NIO China fails to apply for a qualifying initial public offering in July 2024, or fails to complete a qualified public offering in July 2025, NIO needs to repurchase the equity of NIO China held by Strategic Investors in Hefei.
For the management of WEILAI Automobile, whether it is a Hong Kong listing, a Singapore listing, or an A-share listing in the future, it is not a distant thing, the key is to tell the story of Weilai in front of the world, and tell the story of smart electric vehicle companies. Many capital market friends discussed that Weilai's next development has two crucial moves:
The first is to maintain the existing fundamentals of Weilai, including Weilai Automobile, NIO Power, etc. The shortest way to improve market influence is to increase sales, so the delivery of ET7 this year and ET5 next year will be particularly important, and in the forecasts of many Wall Street funds, sales volume is the primary influencing factor of Weilai's valuation.
The second is to take the user experience as the core and carry out business extension. Lao Li often wonders what would happen if Weilai was not an automobile company, but an ecological company. The reason why Xiaomi's valuation is high is that it has built a Xiaomi hardware and software ecosystem with its mobile phone as the center, which radiates to all fields of automobiles.
NIO has always mentioned the user experience, if NIO is user-centric, on the basis of the car, derived to consumer electronics (mobile phones, tablets) in various fields, should its valuation be doubled? Weilai's entry into consumer electronics is not impossible, if Weilai's mobile phone is successful, then Weilai's ecological chain will also be opened.
In the capital market, Weilai's automobile story has been told to the extreme, Weilai's energy story has just begun to tell, the next step, with Weilai landing in the global major markets, will the new story open? We'll see.