Produced | Damo Finance
On March 17, ZeroCar submitted the form on the Hong Kong Stock Exchange, with CICC, Citi, JPMorgan Chase and CCB International as joint sponsors.
The head force of the new car-making force, "Wei Xiaoli", has landed on the Hong Kong Stock Exchange successively after meeting in the US stock market. As of the close of trading on March 18, the market capitalization of Hong Kong stocks "Wei Xiaoli" was HK$253.8 billion, HK$175.7 billion and HK$215.9 billion, respectively.
At present, the competitive pattern of New Energy Vehicles in China has become relatively clear. The sales volume of the head echelon "Wei Xiaoli" in 2021 will exceed the 90,000 number line; the main models of the second-tier echelons of Nezha, Weima and Zero Run are all low-priced models, and they have been competing for the fourth IPO ticket since last year. With the zero running table, the second-tier echelon listing tide has also begun.
Who's zero run
Zero-run cars were founded in December 2015 by Zhu Jiangming, 55, the current year old. As one of the elders of Dahua shares, Zhu Mingjiang and Fu Liquan, the actual controller of Dahua shares, shared the capital feast of zero run.
Prior to the IPO, Mr. and Mrs. Zhu Jiangming and Mr. and Mrs. Fu Liquan held a total of 31.01% of the shares, making them the largest shareholders of Zero Run Technology; Dahua Shares held 8.89%; guosen Securities held 5.7% of the shares as the manager of the employee stock ownership plan of Zero Run Technology. In addition, the shareholders of Zero Run also include Shanghai Electric, Sequoia and so on.
Fu Liquan made a fortune in security monitoring products in his early years, and Dahua Shares, a listed company under his name, was second only to Hikvision's security giant.
Zero Run was originally just a cross-border attempt by Dahua Shares. At the end of 2015 and the beginning of 2017, Dahua Co., Ltd., as the main shareholder, led the establishment of Zero Run Technology and Zero Run Automobile, and merged the latter with Zero Run Technology in 2017. Zhu Jiangming, director and executive vice president of Dahua Co., Ltd., served as the chairman of Zero Run Technology.
In order to focus on the zero-running business, Zhu Jiangming resigned as Executive Vice President and Director of Dahua Co., Ltd. in August 2020 and December 2021 respectively.
Up to now, Fu Liquan and the co-actors hold 36.69% of the shares of Dahua, which is the controlling shareholder, Zhu Mingjiang holds 5.36% of the shares of Dahua shares, and the remaining shareholders hold shares below the holding line. The latest market value of Dahua shares is 50 billion yuan, and the market value of Fu Liquan family and Zhu Mingjiang is 18.345 billion yuan and 2.68 billion yuan respectively.
Ability is not worthy of ambition
In 2021, the sales volume of zero-run cars reached 43,748 units, ranking sixth among the new domestic car-making forces. Although the sales are not outstanding, but in terms of slogans, zero running is the loudest voice.
In July 2019, Zero Run began to deliver the first mass production product electric coupe S01, when the electric coupe products on the market were relatively rare, coupled with a relatively attractive price, S01 attracted more attention after its launch, and more than 4,000 orders were queued in about 1 month.
This brought considerable confidence to zero running, and the sales target for that year was directly set at 10,000 units. But Zero Run clearly underestimated the challenges of capacity and delivery, with only 1,034 S01 delivered in 2019, with only 10% completion of the target.
In May 2020, Zero Run released the T03 micro-electric vehicle, benchmarking Wuling Hongguang MINI, Euler R1 and so on. Due to the low price, the T03 quickly carried the banner of zero-run sales, and sales surged to 8,050 units that year.
In November 2021, the first SUV product C11 was launched, although it failed to achieve the target sales of 60,000 vehicles, it finally "outperformed itself", delivering 43,121 vehicles throughout the year, up 278.6% year-on-year, and standing in the second echelon of the new car-making forces.
Zero-Run's latest goal is to sell 800,000 units a year by 2025. However, considering the "previous crime" of zero running and shouting many times, it is difficult to say how much sales can be achieved in the end.
In the first two months of 2022, the cumulative delivery volume of zero-sports cars has reached 11,520, exceeding the delivery volume in 2020 and ranking fifth among the new car-making forces.
Selling one loses one
From 2019 to 2021, the zero-run revenue was 117 million yuan, 631 million yuan and 3.132 billion yuan, respectively, and the net loss attributable to the mother was 901 million yuan, 1.1 billion yuan and 2.846 billion yuan in the same period. That is to say, since the first car was launched, the cumulative loss of zero running is about 4.55 billion yuan.
In 2021, Zero Run sold 43,748 vehicles, with a net loss of 2.846 billion yuan for the year. Based on this calculation, zero running sold a loss of 65,000 yuan. The main zero-run model is the T03 with a starting price of 50,000-60,000 yuan, which is equivalent to selling a loss of a T03.
According to the zero run plan, 40% of the funds raised from this IPO will be used for research and development, 25% for capacity increase, 25% for business expansion and brand awareness, and the remaining 10% for general operations.
In terms of research and development, zero-running cars have established a global self-developed enterprise development positioning at the beginning, which means that core technologies and application hardware such as three-electric systems and automatic driving must be done by themselves, but from the perspective of zero-run R&D investment, it is still too early to achieve global self-research. In the three years from 2019 to 2021, the cumulative R&D expenditure of zero running was 1.387 billion yuan, accounting for only 35.4% of the total revenue.
It is worth mentioning that the zero run that says that it is necessary to develop the whole region is quite unexpected in the self-development of the chip. The "lack of core" of domestic new energy vehicles has become the norm, and in the words of Li Bin, "it is difficult for us to predict which chip suddenly has some problems." After zero running self-developed intelligent driving chip "Lingxin 01", it did not disclose its plan to develop a new chip. The prospectus also does not mention the follow-up research and development and iteration of the core series chips. This means that Lingxin 01 may become the "masterpiece" of the self-developed automatic driving chip of zero-run cars.
In terms of production capacity, the S01 and T03 in the early days of Zero Run were outsourced to Changjiang Automobile OEM, and after the completion of the Zero Run Jinhua Factory in August 2021, all T03s were produced in the Jinhua Factory. The plant has an annual production capacity of 200,000 units, and according to the plan, the zero-run C11 and C01 models will also be produced at the Jinhua plant. In addition, the Zero Run Hangzhou plant will start construction this year and put into operation in 2023.
The trapping of the trolley
After the zero running table, the market is most concerned about: how much valuation can this company support?
The market's concerns about new energy vehicle companies mainly focus on two aspects: whether the current hot-selling models still have enough vitality, and whether the new models can open up the market? These two questions are the key to answering the question of whether car companies can stand firm in the market at present and for a period of time in the future.
As a typical low-end model, the more it sells, the better, and the more it is not conducive to zero-running to establish a high-end brand image. Moreover, the positioning of zero-run is technology to the company, and cars such as T03 are unlikely to become the protagonists of technology endorsement because of price and target market restrictions, and it is easy to conflict with the brand positioning of zero-run.
Abandoning it, zero run to lose this sales champion, is bound to be the same echelon of Nezha, Weima left behind, and even invincible to other new car-making forces. Moreover, zero running in the IPO process does not dare to easily give up the huge sales and revenue brought by T03.
It is worth mentioning that in the face of lack of cores and rising raw material prices, Zero Run T03 chose to "reduce the amount without reducing the price" to cope. Among them, the best-selling low-end model has shrunk from the previous 403km to 301km, while the price of the 2022 zero-run T03, which has been upgraded in terms of power and intelligent configuration, has risen from 59,800 to 68,900 yuan.
In order to transform the high-end, Zhu Jiangming called the zero-run C11 launched in 2021 a "half-price Model Y", but consumers did not buy it. With less than 4,000 vehicles sold in two months, it may still play a more flag-waving role in the future sales war.
Although C11 shoulders the mission of returning to the mainstream market, it has repeatedly tested the bottom line of consumers. C11 has a common problem of zero-running car delivery difficulties, a "replacement upgrade" at the end of last year, but also a lifetime warranty into an 8-year warranty service, some models of water-cooled motors are also replaced by oil-cooled motors. This has led to the passive "consumption downgrade" of C11 prospective owners who have paid for the car without picking up the car.
As for the zero-run coupe S01, it is getting worse and worse. In 2021, the sales volume was only 634 units, less than a fraction of the sales of the Zero Run T03 and Zero Run C11.
According to the plan, Zero Run will launch the C01 medium and large sedan this year, as well as the four-wheel drive version and range extender version of the C11, and enter overseas markets. By the end of 2025, Zero Run will launch 8 models, covering the price range of 350,000 or less.
Although zero-run did not disclose the pricing of the C01 in the prospectus, according to the market news that was previously circulated, the price of the model will be between 150,000 and 200,000 yuan. The market view is that if C01 is priced reasonably, it is expected to become a new traffic burden of zero running and pull up the brand image of zero running. At the same time, the view is that with the technical strength and supply chain capabilities shown by zero running in the market at present, its products are far from reaching the stage of positive hard and rigid "Wei Xiaoli".
In fact, the collective exploration of the new forces of head car manufacturing and the electrification transformation of traditional car companies have made the 150,000-200,000 yuan market one of the most competitive markets for new energy cars in China. After the launch of the Zero Run C01, it will face head-on competition with Xiaopeng P5, GAC AION S and BYD Qin Plus. In contrast, the solid image of the zero-run low-end market, coupled with the fact that the software and hardware do not have obvious advantages, it is difficult to open the gap with other competitors with strong endorsements in the hard fight.
The variable in the future of the new car-making forces is the Internet giant that has crossed the border. At the end of February this year, the Zhiji L7 cooperated by SAIC And Ali has been officially put into production. Baidu and Xiaomi's cars are also scheduled to start mass production in 2023 and 2024.
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