CITIC Securities: The sinking of sales channels of new car-making forces helps expand share, but the efficiency difference is worth paying attention to

Zhitong Finance APP learned that CITIC Securities released a research report saying that due to the systematic adjustment of Chinese stocks, the fundamentals and stock prices of the three new forces have deviated seriously from the end of 2021 to the beginning of 2022, but CITIC Securities believes that the new forces have now shown excellent allocation value. The dimension of market capitalization/gross profit, the market value/gross profit multiple of the new forces has been comparable with traditional car companies. From the perspective of PS, the current stock price corresponds to 2.5/2.8/2.6 times PS in 2022. CITIC Securities believes that in the long run, after the slowdown in the scale of capital expenditure and R&D investment, the hardware steady-state net profit of the new forces is expected to reach 10%. Reiterate the recommendation: Ideal Car (Li.US) (02015), Xperon Motor (XPEV. US) (09868), NIO. US)(09866)。

The main points are as follows:

The sinking trend of new energy passenger vehicles is obvious, and the future increase is expected to mainly come from new first-tier and second- and third-tier cities.

In 2021, the penetration rate of domestic retail caliber new energy vehicles and passenger cars has reached 14.4%, a significant increase of 8.5pcts from the previous month. Driven by high-quality supply, the EV penetration rate of first-tier cities increased from 18.2% to 30.4%, and the penetration rate of new first-tier, second-tier and third-tier cities also increased significantly from 6.5%, 3.9% and 4.9% to 16.7%, 12.6% and 12.3% respectively; the new first-tier and second-tier and third-tier cities contributed to the consumption of 1.23 million new energy vehicles, accounting for 69% of the annual new energy market increase. On the other hand, passenger car sales in first-tier cities will account for only 10% of the country's total sales in 2021; new first-tier cities, second-tier and third-tier cities are larger consumer markets, accounting for 24%, 22% and 21% of the total national sales respectively. CITIC Securities believes that in the process of new energy vehicle sales from 3 million to 5 million and 10 million, the consumption of new energy vehicles will continue to sink, and the increment and sinking efficiency outside the first-tier cities will be very important.

CITIC Securities is optimistic about the new power car companies sinking through channels to obtain better sales growth.

2021 is a year of rapid increase in the number of new power stores, Tesla, Weilai, Ideal, Xiaopeng in January 2022 the number of stores were 237, 377, 220, 401, respectively, +38%, +69%, +261%, +120% year-on-year. The proportion of stores in first-tier, new first-tier and second-tier cities of the four car companies decreased from 24.5%, 33.9% and 26.3% to 20.7%, 31.9% and 24.5%; the proportion of stores in third-tier and fourth-tier cities increased from 11.6% and 3.3% to 15.6% and 6.7% respectively, and the trend of sinking of new power stores in the past year is obvious. At present, the new forces model matrix is still in the process of continuous enrichment and completion, in addition to attracting customers with different needs by launching new models, the new forces also have the potential to gain growth through sales volume. For example, the distribution of the ideal ONE compared to its competitor Highlander is relatively concentrated, mainly because the channel has not yet completed the sinking; first-tier, new first-tier and second-tier cities contribute 89% of the ideal sales, while Highlander's value is only 58%.

Channel efficiency affects profitability, and the three domestic ideal cars are currently the most efficient.

CITIC Securities measures store efficiency by calculating the average monthly sales volume of a single store. In 2021, Tesla's average sales volume in first-tier to third-tier cities can reach about 170 vehicles /month, without losing the efficiency of a single store due to the sinking of channels, and the high efficiency of opening stores highlights its unique brand appeal. The average monthly sales of stores in the first-tier cities of Ideal, Weilai and Xiaopeng are 114, 67 and 56 respectively, and the performance is already very good, and the difference is not as obvious as the sinking channel.

However, with the sinking of stores, the performance of each company began to differentiate: in second-tier to fourth-tier cities, the average sales volume of ideal stores was higher, about 50 to 60 units/month. The store efficiency of Weilai and Xiaopeng has declined, of which the average monthly sales of Xiaopeng in second- and third-tier cities are about 26 or 22 units, and the number of fourth-tier cities is 13 units. The average monthly sales of WEILAI's second-tier to fourth-tier cities are 28, 7 and 5 units, respectively. In addition, according to the estimates of CITIC Securities, the inefficient stores of Tesla, Weilai, Ideal and Xiaopeng (opened for more than 3 months but the average store sales in the city >

Channel efficiency may become an important winner or loser of whether the new force bicycle SG&A can be quickly diluted, and it is also one of the important factors affecting its break-even point. Taking 21Q3 as an example, the bicycle SG&A of Ideal, Xiaopeng and WEIlai were 4.1, 60 and 75,000 yuan respectively, accounting for 13.8%, 26.9% and 18.6% of the revenue. Due to the difference in the current positioning of the main sales model of each car company, the current sinking efficiency cannot represent the performance of the endgame, but the dynamic change of this efficiency indicator is worth tracking for a long time.

The launch of the flagship product of the new force in 2022 is expected to open up the leading position of the joint venture car company.

Consumer awareness of electric and intelligent vehicles in the Chinese market is improving, and the original joint venture car companies have not provided enough high-quality intelligent tram supply, and the new forces are expected to consolidate their dominant position through new flagship products in 2022.

In terms of models, the three models released by WEILAI this year are based on the new NT2.0 platform, and it is expected that there will be significant upgrades in power and intelligence compared with the first three cars. Among them, the MEDIUM AND LARGE SED CAR ET7 is expected to be officially delivered on March 28, 2022, the ET5 has been released, and is expected to be delivered in September 2022; the ES7 is expected to be released in April 2022 and delivered in July 2022. CITIC Securities believes that NIO ET7 and ET5 will climb to the level of 4000/6000-8000 per month this year.

Ideal recently announced the interior details of the second car , the Ideal L9 (code name X01); the L9 is innovatively equipped with five screens including center control, co-pilot and rear cabin entertainment screens, oversized HUD, steering wheel screen, etc., which is expected to bring a new height to the cockpit intelligent experience; and 2 Qualcomm 8155 chips are standard to provide computing power support for the cockpit. The model is expected to be officially released in April 2022 and will be available in Q3 2022. CITIC Securities expects that the monthly production and sales are expected to reach the order of 5,000 units within the year.

Xiaopeng launched the G9 medium and large SUV this year and is expected to start scheduling with mid-2022 and delivery in Q3 2022. In terms of intelligence, the model is equipped with XP4.0 system, compared with the XP3.5 system of P5, it will increase the computing power, thereby bringing a better urban assisted driving experience, and the company is expected to continue to break through the imagination of China's assisted driving experience. CITIC Securities expects G9 production and sales to climb to the level of 6,000-8,000 vehicles this year. CITIC Securities maintains the 2022 sales forecast of NIO/Ideal/Xiaopeng at 18/18/200,000 units and revenue forecast of 678/558/45 billion yuan.

This article is compiled from the WeChat public account "CITIC Securities Research", authors: Yin Xinchi, Li Jingtao, Li Zijun; Zhitong Finance Editor: Chu Yunwei.