Text | Shentucar, by | Dawn, edited by | Wei Jia
On the evening of March 17, the electric vehicle company Zero Run Auto disclosed a prospectus to be listed on the Hong Kong Stock Exchange. This is the first IPO application outside of "Wei Xiaoli" after a year and a half.
Compared with Wei Xiaoli, whether it is in the brand volume, cash reserves, or new car sales, zero run is an order of magnitude smaller, and it is a "second echelon" of car building.
Last year, Zero Run delivered a total of 43,748 vehicles, ranking fourth among China's pure electric vehicle companies, preceded by Xiaopeng, Weilai and Nezha. Nezha is also a second-tier player, plus Weima, who has fallen behind, and these three companies have previously reported the news of an IPO. Nowadays, it seems that zero running or taking the lead in grabbing tickets.
Since its establishment, there have been eight rounds of zero-run financing, with an amount of more than 10 billion yuan, and 8.8 billion yuan was raised last year alone. But it has accumulated a loss of 4.8 billion yuan in the past three years, and the loss has widened year by year, losing 2.8 billion yuan last year, while the annual revenue was only 3.1 billion yuan. At the end of last year, it had $5.7 billion in cash on its books. In contrast, the cash reserves of Weilai, Ideal and Xiaopeng are all more than 20 billion yuan.
Zero run is still short of money and needs to continue financing.
Will the market pay for the dream of zero running? DeepWay dismantled the zero-run prospectus and tried to find the answer. Let's start with the conclusion:
1, zero running is still in the stage of huge loss of money, selling a loss of one, it is impossible to make money in the short term.
2, global self-development and intelligence is the selling point of zero running, but whether this can be transformed into a positive business return, it will take time to test.
3, zero run wants to do high-end, but now the main model T03 is priced at less than 100,000, and the future rush to the high depends on new models.
Selling one at a loss, the real loss is profitable
Zero Run was established in 2015, and now there are three mass-produced models, all of which are pure electric vehicles.
The first car was delivered starting in 2019, followed by a new car pushed every year. As sales increased, zero-run revenue also began to increase.
From 2019 to 2021, the revenue of zero running will be 120 million yuan, 630 million yuan and 3.13 billion yuan, respectively. It can be very obvious from this that the first two years were basically small fights, and it was not until 2021 that the volume began to rise.
The annual revenue of 3 billion yuan is not large in the automotive industry. For example, the ideal is also to start delivery in 2019, the annual revenue is only 280 million yuan, but the second year is close to 10 billion yuan, which is 3 times the zero run.
From the perspective of the node of the IPO, WEILAI went to the United States in 2018 with a revenue of 4.95 billion yuan; Ideal and Xiaopeng went public in the United States in 2020, with a revenue of 9.46 billion yuan and 5.84 billion yuan respectively. The annual income of the three new forces is more than 5 billion yuan, which is higher than zero running.
On the one hand, this is because the sales of zero-run are small, and the second is because the car is sold cheaply. If sales don't go up, car prices are low, and revenue can't get up.
More critically, the gross profit of zero run is still negative and has expanded year by year. That means the company still isn't making money.
In 2021, Zero Run sold 43,748 vehicles, with the company's revenue of 3.13 billion yuan and bicycle income of 72,000 yuan. But the cost of these cars is 4.52 billion yuan, much higher than the revenue, and the company's gross loss is 1.39 billion yuan. This is equivalent to a loss of 32,000 yuan for every car sold, zero running. Selling two cars is almost a loss.
And that's not counting the miscellaneous expenses, such as more than 700 million research and development expenses a year. To take into account all kinds of expenses, zero running is to sell one car at a loss. This is really selling a car at a loss.
However, it is understandable that the car is already very expensive, and it needs a lot of investment in the early stage. The zero-run car has only been officially delivered for three years, and it is too early to talk about profitability in the case of a small sales base.
Contrast with Wei Xiaoli. The ideal is also to start delivering the first car in 2019, and the company's gross profit margin was also negative that year, but it turned positive in 2020 and increased to 21% in 2021. Weilai and Xiaopeng are the same, in 2019 are negative gross profit, but 2020 has turned positive.
Chai Daixuan, director of CIC Insight Consulting, told Shentu that when Li Xiaowei was IPO, its gross profit margin level had basically turned positive or was about to be positive, and the current gross profit margin level of zero run was still far from being positive, which was expected to become a relatively large obstacle to its listing to seek blood transfusion.
In fact, zero run did not really start to exert strength until last year, with sales spanning from 8,000 to 40,000, revenue rising from 600 million yuan to more than 3 billion yuan, and expenses soaring in this year.
The rapid expansion of offline stores was also last year. At the end of 2020, there were 95 stores in Zero Run, tripling to 291 at the end of last year. Most of these stores are concentrated in first- and second-tier cities, but only 23 are directly operated stores.
Number of zero-run car stores
Zero run tries to exchange money for time and input for growth. In the financial report, zero run has been emphasizing growth rate, but not highlighting scale. It calls itself the fastest-growing of China's new car-making forces.
Mini cars have no future, and zero runs must go high-end
In the prospectus, Zero Run spent a lot of time introducing its market strategy: "We focus on the 150,000 yuan to 300,000 yuan of China's high-end mainstream new energy vehicle market. ”
It cites Data from Frost & Sullivan, saying that new energy vehicles in the price range of 150,000-300,000 yuan in 2021 account for 39% of China's total sales of new energy vehicles, and will further increase to 49% in 2026, becoming the main driver of market growth.
But the truth is that zero run has not won this market.
S01 is the first car with zero running, which is a small pure electric coupe, priced at up to 150,000 yuan, just touching the lower limit of the price band of 150,000-300,000 yuan. From the perspective of product strategy, Zero Run really wanted to do mid-to-high-end at the beginning. But the car is not a success, and so far it has sold less than 3,000 units.
Later, Zero Run launched the second car T03, which saved the situation. Of the total deliveries of 43,748 vehicles in 2021, 39,149 were T03, accounting for 90%. T03 is a well-deserved sales force. Therefore, although there are three mass production cars for zero running, there is actually only one of them now.
Embarrassingly, the T03 is a mini-car with a length of only 3 meters 6 and a wheelbase of 2 meters 4, which is not much larger than the Macro MINI. More importantly, the price of T03 is between 69,000 and 85,000 yuan, which is lower than the previous price band, and it is more and more distant from the positioning of the middle and high-end.
Moreover, mini cars are not the mainstream of the market, the ceiling is not high, and the imagination space for making money is not large. Hongguang MINI, the highest-selling hongguang, has a monthly delivery volume that is almost catching up with the zero-run T03 for a year, but it still doesn't make much money.
"T03 positioning A0-class models, similar to Hongguang MINIEV, the main super cost-effective, such models have a low threshold, the current and future competition is mainly in the price dimension, it is difficult to build other core competitiveness, so this type of model for the profit contribution of car companies is very limited." Chai Dai spin analysis.
So we look back, the first two cars with zero running did not enter its desired price range, nor did they reach the mainstream consumer population, but it was a bit like testing the waters.
So Zero Run launched a third car, the C11.
The car began to be delivered in October last year, positioning a medium-sized pure electric SUV, priced at between 160,000 and 200,000 yuan, "for China's high-end mainstream new energy vehicle market." Zero Run piles up its latest current technology and features on this car. According to it, the listing of C11 announced that zero-run officially leapt into the 2.0 era and fully entered the first camp of new car-making forces.
Whether the market is willing to pay for it or not will remain to be tested. Three months after its launch, less than 4,000 C11s were delivered. But zero-run said that the total number of orders at the end of last year was 22,536.
The strategic path of zero running is still clear, that is, we must do the middle and high-end, enter the mainstream price band with the fiercest competition, and compete directly with Wei Xiaoli.
At the Beijing Auto Show in April this year, Zero Run will launch its fourth car, the C01, and deliveries are scheduled to begin in the third quarter. This is a medium and large sedan, based on the same platform of C11, with a body length of more than 5 meters, an endurance of more than 700 kilometers, and an acceleration time of less than 4 seconds per 100 kilometers. Some people believe that the C01 will be benchmarked against the BYD Han EV and Xiaopeng P7.
Chai Daixuan told Shentu that the high-end market of 100,000-300,000 yuan is currently very competitive, including WM, Xiaopeng and domestic BYD, which have established strong brand recognition among consumers, "So we believe that the future sales of zero running are not optimistic." ”
If S01 and T03 represent the past of zero-run, then the C11, C01 and subsequent new models represent the future of zero-run. These models with higher configurations, stronger functions and more expensive prices will be more conducive to zero-run brand image and better profit margins. Of course, more money is needed.
Intelligence is very fragrant, but selling more cars is king
Among the second echelon players of car building, zero run is not the highest selling, but the loudest voice.
In addition to the above-mentioned slogan of entering the first camp of the new forces, Zero Run even proposes a more ambitious goal - to surpass Tesla in the field of intelligence within three years.
Intelligence is a point that zero running has been publicized to the outside world, C11 will try its best to put this label on itself, and the next mass-produced C01 should also be this strategy.
In the prospectus, Zero Run claims to be the only new car-making force in China with global self-research capabilities. Previously, Xiaopeng has been calling itself the world's only two full-stack self-developed mass production car companies (the first is Tesla).
According to Zhu Jiangming, the founder of Zero Run, global self-research is more high-end than full-stack self-research. Full-stack self-development only includes software, not hardware, and hardware must rely on third parties. The global self-research is built from the bottom layer to achieve independent research and development of all software and hardware. From the beginning of its establishment, Zero Run did not take the route of other new car-making forces relying on external forces to grow rapidly, but started from every control software of every part of the car, and insisted on taking the self-developed route.
This method of independent research and development is worthy of affirmation, but whether it is worth it, whether it is suitable for it, and how the actual effect is, still depends on the product.
Compared with Xiaopeng, at least in the past, the outside world definitely has more xiaopeng. Taking assisted driving as an example, Xiaopeng has achieved high-speed NGP navigation assisted driving last year, and then began to test urban NGP, and is expected to land this year, not only with large-scale delivery of mass production models, but also a large number of driving data. There is no comparison between zero runs in this regard.
An investor in the automotive industry said to Shentu, "The research and development capability of zero run is OK, with Dahua endorsement, visual processing ability is also OK, and there is a relatively low-cost self-research system." "Dahua is the world's second largest security manufacturer and an investor in zero-run.
This is indeed an advantage of zero running. According to the prospectus, by the end of 2021, there are a total of 3190 employees in Zero Run, of which 1082 are R&D personnel, accounting for 34%. In contrast, the ideal R & D personnel are 3415 people, accounting for 29%; Xiaopeng's R & D team is about 4000 people.
Employee structure of zero-run cars
Less personnel investment means lower costs.
From 2019 to 2021, the annual R&D expenditure of Zero Run was 360 million yuan, 290 million yuan and 740 million yuan, respectively. Ideal spent 790 million yuan on research and development in 2018, when Ideal did not sell a single car. Last year, Ideal invested 3.3 billion yuan in research and development, which is 4.5 times that of zero run. Xiaopeng's research and development expenditure in the first three quarters of last year has reached 2.66 billion yuan.
How to achieve higher intelligence with less R&D team and less R&D expenditure is a question worth exploring.
However, no matter how cool the intelligent label is, it is only one of the factors that affect consumer decision-making, and ultimately it depends on sales and word of mouth.
Now, the slogan of zero running has been shouted out, the IPO application has been submitted, and the next step is to see how many C11 and C01 cars can play.