Written by / Han Ling
Edited / Mao Shiyang
(Photo: Visual China)
Zero run crazy "put satellite": the more you sell, the more miserable the loss
Following the listing of Xiaopeng, Ideal and Weilai in Hong Kong, the new forces of second-tier car manufacturing have also begun to sit still, and Zero Run Automobile is trying to become the fourth listed company among the new domestic car-making forces.
According to the website of the Hong Kong Stock Exchange, on the evening of March 17, Zhejiang Zero Run Technology Co., Ltd. (hereinafter referred to as "Zero Run Auto") submitted a listing application to the Hong Kong Stock Exchange, and the co-sponsors were CICC, Citibank, JPMorgan Chase and CCB International.
Although Zero Run CEO Zhu Jiangming has always emphasized that Zero Run is a "low-key and pragmatic" car manufacturer, under the impetus of the listing goal, Zero Run has suddenly become high-profile. According to the prospectus, in the equity structure of zero running, CEO Zhu Jiangming directly holds 9.15% of the shares, but through the concerted action arrangement, Zhu Jiangming holds a total of 31.01% of the equity of zero running.
In fact, the news of the zero-run listing has been reported as early as the beginning of this year, and in late January this year, the industrial and commercial changes of zero-running cars, and the registered capital increased from 908 million yuan to 2.908 billion yuan, an increase of more than 220%. At that time, the outside world widely speculated that this was preparing for listing, and there was a high probability that zero running would choose to land on the Hong Kong stock market. A few days later, on January 27 this year, the China Securities Regulatory Commission (CSRC) announced the progress of the "Approval of Overseas Initial Public Offering of Shares (Including Ordinary Shares, Preferred Shares and Other Stocks and Derivative Forms of Stocks)", saying that it had reached the stage of receiving materials.
But in fact, Hong Kong stocks were not the first choice for zero running.
As early as two years ago, Wu Baojun, co-founder and president of Zero Run Automobile, revealed that Zero Run intends to be listed on the A-share Science and Technology Innovation Board, "We want to strengthen the docking with the capital market like the domestic Weilai Automobile and ideal automobile." "It can be seen that Zero Run has a very strong willingness to land on the capital market very early. At that time, Wu Baojun said that Zero Run would submit IPO documents in the second half of 2021 and be listed on the Sci-Tech Innovation Board at the end of 2021 or early 2022. He also stressed that there will be another round of financing before the IPO zero run.
However, the stronger peers have successively failed to sprint to the science and technology innovation board, and zero running seems that they cannot wait for the science and technology innovation board.
In 2020, Geely Automobile proposed a listing plan on the Science and Technology Innovation Board, and was later exposed to withdraw the IPO application of the Science and Technology Innovation Board. In the same year, WM also chose the Science and Technology Innovation Board, intending to become the "first new energy stock of the Science and Technology Innovation Board". However, only 2 months after the application was accepted, the media reported that the listing process of the WM Sci-Tech Innovation Board was suspended, which may be due to the tightening of the requirements of the Listing Committee of the Sci-Tech Innovation Board on the review of the scientific and technological attributes of enterprises. Under the tightening of domestic science and technology innovation board supervision, choosing to list in Hong Kong may be the most "prudent" way.
Zero run, which is preparing for the listing, began to frantically "put satellites" on corporate goals.
Zhu Jiangming, CEO of Zero Run in 2020, said that the company plans to officially launch an IPO in 2021, at the same time, Zero Run will enter the top 3 domestic new forces in 2023 and obtain a market share of 10% of the domestic new energy vehicle market in 2025.
By 2021, the goal of zero running has become more aggressive. At the 2021 Zero-Run Car 2.0 Strategy Conference, Zhu Jiangming shouted out the slogans of "3 years beyond Tesla", "4 years to push 8 new cars", "2025 sales of 800,000 vehicles", and to achieve anti-overtake and leadership of Tesla in intelligent driving technology.
For the zero run, which is not strong, this is more like attracting attention from the outside world.
According to the official sales data released by Zero Run, a total of 43,000 vehicles were delivered in 2021, of which 38,000 units were delivered in the Zero Run T03 and 4,021 vehicles were delivered in the Zero Run C11. In the 2021 delivery volume ranking of new car-making forces, Zero Run ranks sixth after Nezha and Weima. Compared with previous years, the sales volume of zero run in 2021 has indeed achieved a more significant increase.
But in fact, the sales scale of zero running was only rushed up last year. In 2020, its cumulative annual sales volume was only about 8,000 vehicles.
After the sharp increase in sales in 2021, the revenue of zero running also showed an upward trend. In 2021, the zero running revenue was 3.132 billion yuan, while in 2019 and 2020, this data was only 117 million yuan and 631 million yuan, respectively. At the same time, the loss of gross margin further narrowed, and in 2019-2021, the gross profit margin of zero run was -95.7%, -50.6% and -44.3%, respectively.
The increase in revenue does not mean that zero running has the ability to make self-hematopoiesis, but because the gross profit of bicycles is low, the loss is gradually increasing. In 2019, 2020 and 2021, the net loss of zero run was 810 million yuan, 935 million yuan and 2.629 billion yuan, respectively. In 2021, the best-selling year, Zero Run lost the most.
From January to February this year, the delivery volume of zero-running cars has reached 11,500 units, exceeding the annual delivery volume of zero-running cars in 2020. However, if you want to be recognized by the capital market, the sales performance and profitability of zero run are not convincing enough, and you must show more potential in terms of sales volume and revenue ability.
Financing tens of billions, research and development investment of 1.4 billion yuan
According to the listing application submitted by Zero Run, from 2019 to 2021, Zero Run lost a total of 4.374 billion yuan, which is the smallest loss among the new car manufacturers known.
"Finance and Economics" Weekly combed and found that zero running from January 2018 to January 2018 to August 2121 C2 round, a total of 7 rounds of financing zero running raised a total of 11.866 billion yuan. Compared with the loss of 4.3 billion yuan in the three years from 2019 to 2021, zero running does not seem to be short of money.
The zero-run of "saving money" sacrifices the research and development investment that the new car-making forces value most. According to the prospectus, from 2019 to 2021, the R&D expenditure of zero-run is 358 million yuan, 289 million yuan and 740 million yuan respectively, and the total R&D investment in the three years is 1.387 billion yuan.
In contrast, in the first three quarters of 2021, Xiaopeng, Weilai and Ideal invested 2.663 billion yuan, 2.073 billion yuan and 2.057 billion yuan in research and development respectively, and the cumulative expenditure on research and development in the three years of zero running was only a little more than half of Xiaopeng's research and development investment in the 9 months last year.
Behind the zero-run low R&D investment, small cars are the main force of the company's "impulse". In order to achieve the goal of going to market faster, Zero Run had to launch some more expensive models to increase sales.
In May 2020, ZeroCar launched its second production model, the T03. Looking back now, T03 has indeed cut into the A00-class pure electric car market very accurately, and T03 has quickly become the main sales model of Zero Run, accounting for 88% of all sales in 2021.
This is not the same as the previous zero-run positioning. In fact, the first car on the zero-run market, the S01, is aimed at Tesla, and in the listing publicity, the official S01's intelligent driving assistance system is comparable to Tesla. Zhu Jiangming said that S01 "user orders exceed 3,000 units, sales of more than 10,000 is enough confidence." But monthly sales that year were only double digits, and in 2020, sales were only more than 1,000 vehicles. Last year's full-year sales were waterloo, with only 634 units.
It is worth noting that T03 positioning long-endurance intelligent pure electric car, the price of 60,000-80,000 yuan, its contribution to zero running income is extremely limited. Not to mention, among the same level of models, there are also small electric vehicles like Nezha and traditional car companies, which further weakens the competitiveness of zero-run.
Previously, an industry analyst said in an interview with the "Finance world" weekly that although the sales of micro-electric vehicles are considerable, in fact, the more they sell, the more they lose, and the ceiling for the growth of consumer groups is also very obvious. If car companies only rely on mini cars to achieve profitability, it is very difficult.
In order to further enrich the product matrix and break the label of "car" on zero run, zero run launched the medium-sized SUV zero run C11 in 2021. In terms of sales, this car has not yet been able to support the upward burden of the zero-run brand, and its annual delivery volume in 2021 is 3964 units. Compared with other new forces' similar models, it has only barely reached the passing line.
According to Zhu Jiangming's plan for zero-running, this year's zero-running car will release 4 new models, and in the next five years, it will launch new cars including cars, SUVs, MPVs and other models at a pace of 2-3 models per year, covering pure electric and range extender two power systems, and strive to achieve the goal of 800,000 vehicles sold in 2025. This means that in order to support new cars and technology research and development, zero-run must have enough funds, and going public is almost its only option.
Second-tier car-making forces, "fighting" for listing?
In the second echelon of new car-making forces, Zero Run is not the first player who wants to land on the capital market, its competitors Nezha and Weima have performed better than Zero Run in market sales, and have prepared for listing a few years ago.
Nezha's cumulative sales in 2021 will be close to 70,000 vehicles, ranking fourth in new car sales. But compared with zero running, Nezha Car is relatively low-key, CEO Daniel Zhang said to the outside world that "there is no point in briefly surpassing, and Nezha's user group is more popular, according to this logic, only 3 times the ideal can be said to be stronger than him." ”
On February 21, Nezha Automobile's parent company, Hezhong New Energy Automobile Co., Ltd., once again obtained a financing of more than 2 billion yuan in the D++ round with the participation of CRRC Fund and Shenzhen Venture Capital. After completing this round of financing, the valuation of Nezha Automobile exceeded 25 billion yuan. According to the news, at present, Nezha has opened a Pre-IPO round of financing with a target valuation of about 45 billion yuan, and plans to launch an IPO in Hong Kong this year.
Zhou Hongyi, product manager of Nezha Automobile, said when talking about why he chose Nezha, "Weilai, Xiaopeng and Ideal are all listed, so I have very little space to choose", Zhou Hongyi said that he would prefer to choose a startup like Nezha. This is also widely interpreted by the outside world as Zhou Hongyi's favorite Nezha, and he is ultimately going to go public.
The strength of another opponent, Weima, can not be underestimated, once Weima as a new front-line force, alongside Wei Xiaoli, now gradually retreated to the second line, and even surpassed by Nezha. Last year, WM's annual sales were the closest to zero-run, at 44,000 units, a difference of less than 500 units.
In terms of financing scale, WM has obtained financing of 10 billion yuan and more than 450 million US dollars since 2020. At present, the total financing amount has exceeded that of Wei Xiaoli before the listing. However, even if the financing exceeds 11 rounds, WM has not been able to go public. In 2020, WM began to prepare for listing on the Science and Technology Innovation Board, determined to become the "first stock of the science and technology innovation board". At that time, new forces such as Zero Run and Aiways also sent out signals to be listed on the Science and Technology Innovation Board. However, in the end, due to regulatory reasons, the listing was not successful. Since then, WM has begun to seek the Hong Kong stock market.
Now, with zero running submitted the prospectus, the outside world has once again focused on the second-tier new car-making forces to go public in Hong Kong. But the question is, why does the capital market look at these second-tier car-making forces? In the current capital market environment, can the HKEx still approve listing applications from so many new forces?
According to the data of the Association, the penetration rate of the domestic new energy vehicle market in 2021 has reached 14.8%. The rise from 5% to nearly 15% took just one year. In order to be able to seize market share faster, second-tier new forces can only survive in the rival electric vehicle market by seeking more funds through listing to support the research and development of follow-up products.