Born seven years ago, Zero Run will become the fourth listed new car-making force, backed by the technical foundation of Dahua shares, Zhu Jiangming's third entrepreneurship ushered in an accelerated moment
Photo/ Zero Run Car official website
Text | Caijing reporter Li Haoyin
Edit | Shi Zhiliang
After Wei Xiaoli, the Hong Kong Stock Exchange will usher in the fourth new car-making force.
On the evening of March 17, ZeroCar submitted a listing application to the Hong Kong Stock Exchange, and the co-sponsors were CICC, Citi, JPMorgan Chase and CCB International.
Zero Run plans to expand the team of 40% of the users raised by the IPO to develop and improve electrification, autonomous driving, and smart cockpit technologies; 25% to increase production capacity and promote production automation; 25% to expand business and enhance brands; and 10% to operate for their own and general corporate uses. At present, it is not clear how much money is planned to be raised.
If the IPO is successful, it will not only have more fundraising platforms, but also an opportunity to improve the level of corporate governance. With the blessing of the first two, the leader of the new car manufacturing force will gradually exert the Matthew effect.
This gives Zero Run the confidence to push new cars every year in the next few years, self-develop the whole region, and the core technology in hand.
Who is Zero Run?
Zero Run was born in 2015. In 2021, a total of 43,748 electric vehicles were delivered at zero-run, an increase of 443.5% over 2020. According to Frost & Sullivan, Zero Run is the fastest growing of China's leading emerging electric vehicle companies in terms of deliveries.
In the past few years, with the continuous expansion of zero running, the company's revenue has grown at the same time, and the loss has also expanded.
According to the prospectus, from 2019 to 2021, the total revenue of zero-run cars was 117 million yuan, 631 million yuan and 3.132 billion yuan, respectively; the net loss was 901 million yuan, 1.1 billion yuan and 2.845 billion yuan, respectively.
However, with the production and sales volume of models, the gross profit margin of zero-run is gradually improving, -95.7%, -50.6% and -44.3% in the same period, respectively.
Zero run is aimed at 150,000 yuan to 300,000 yuan, which is the domestic high-end mainstream market in this price range.
Judging from the existing products on sale, Zero Run is continuing to strive to get close to its own "human design". In the past three years, Zero Run has delivered the coupe S01, mini car T03, and medium-sized SUV C11 at a rate of one per year, all of which are pure electric vehicle models.
By the end of 2021, there were 291 zero-run cars, of which the fastest growth in 2021, an increase of nearly 200 from 95 the previous year.
By 2025, ZeroCar plans to launch eight new models, including sedans, SUVs and MPVs of various sizes. In the second quarter of this year, Zero Run plans to launch a pure electric medium and large sedan C01, which is expected to have a body length of more than 5 meters, equipped with a 90 kWh battery, and accelerate 100 kilometers in 4 seconds.
2020 is the key point for the acceleration of zero-run capitalization operations.
At that time, China's auto market was in a cyclical adjustment of the overall decline. Whether it is the new car-making forces at the head or the traditional car-making enterprises, they are facing the "darkest hour". Zero running is no exception, in addition to the cooling of the environment, the first coupe S01 encountered the "mass production hell" that the first car will inevitably experience, production capacity, quality control plagued zero running, resulting in this was born different from others, hoping to meet the niche market to play the "long tail effect" of the model, did not open the market situation as scheduled.
At that time, Zhu Jiangming, the founder and chairman of Zero Run Automobile, publicly stated that he would boost the confidence of partners, "Even if there is no financing, Zero Run can live for another three years." Behind his confidence is the intelligent security head enterprise Dahua Shares (600257. SH) is able to continuously channel funds for zero runs. "Of course we want to raise more money and grow faster."
Everything starts in the second half of 2020, pressing the accelerator key. With Tesla putting into production in Shanghai, China, its stock price in the United States has gone all the way up, so that the stock prices of Weilai, Xiaopeng and Ideal have also gone all the way up, and after fully accepting the industrial development vision of automobile transformation and upgrading, capital has rushed forward.
Zero Run completed the B round of financing in January 2021, introducing SDIC Chuangyi and Zhejiang University Jiuyonghua Capital. The Hefei government investment platform, which is highly praised in the new energy investment circle, also spent 200 million yuan to participate in the B round of financing for zero-running cars. The C round company introduced CICC and Qingdao Carbon Peak.
"It seems that in an instant, the car has changed from a sunset industry to a sunrise industry." An investor lamented to the Caijing reporter.
"Zero run is likely to be their (capital's) last ticket." Zhu Jiangming said bluntly that the performance of Weilai, Xiaopeng and the ideal after the listing has made many investors feel that the investment opportunities in new energy vehicles are good. Returning to the zero-run car itself, with the rise of zero-run sales, the improvement of user reputation and the release of new cars, the capital side also sees the hope of the future.
Nowadays, Hong Kong stocks are ushering in a wave of car companies listing, and many new car-making forces such as Gaohe Automobile, Weima Automobile, and Nezha Automobile have broken out that they will go to Hong Kong for listing.
Some analysts said that due to the previous consumer data security problems of US stocks and the recent uncertain listing time of A-shares auto stocks, in contrast, more and more car companies will choose Hong Kong stocks. However, how to get the desired valuation in Hong Kong stocks is still difficult. After all, capital prefers to congregate to head companies.
Helmsman Zhu Jiangming and his security background
"When I first wanted to make cars in 2015, I really didn't know what the majors of cars were, I went to recruit people, which people I wanted to recruit, it was all a smear." Zhu Jiangming once recalled this.
Before entering the new energy field, Zhu Jiangming, then vice chairman of Dahua Co., Ltd. and CTO, had two successful entrepreneurial experiences in the field of communication scheduling and security. Born in 1967, he graduated from Zhejiang University and has always been passionate about DIY. He was the director and general manager of business operations of Hangzhou Motorola Technology Co., Ltd., and went to the sea in 1993 to start a business.
In 2000, together with friends, Dahua shares entered the security industry, using patented technology HDCVI to break the monopoly of foreign cameras, so far every two cameras in the world have adopted this industry standard, and Dahua shares account for the second largest market share in the field of security monitoring in the world.
From past experience, Zhu Jiangming has two major advantages in starting a business, one of which is a keen sense of smell. Starting from the enterprise dispatching machine, to the transformation of security equipment in 2001, it has experienced two successful entrepreneurial processes from 0 to 1. He delved into the pain points of intelligent monitoring technology, looked at the accelerated urbanization process and the security needs of blowouts, and built a head enterprise with a market value of tens of billions.
A few years ago, based on a trip to Spain, watching many merchants provide electric bicycles for pedestrians, he found that this was still blank in the Chinese market at that time, which would be a huge market. Therefore, Zhu Jiangming has the idea of starting a business for the third time: first, the top ten of the world's top 500 companies, in addition to the supermarket Wal-Mart, all related to cars; second, the core technology of automobiles has changed, and intelligent networking is the focus. It just so happens that visual recognition and algorithms are Dahua's core skills. It just so happens that the Internet of Everything is the value of all smart hardware.
Start with the algorithm and eventually land on the hardware. This is the past experience of unicorns in the computer vision industry. When the car is gradually intelligent and the occupants regard the car as a new living space rather than a simple travel tool, the car has undergone two major changes: first, the core value has changed from traditional manufacturing to intelligent networked product experience; second, the head enterprises in the supply chain have the opportunity to directly connect with C-end consumers and sit on the greatest commercial value.
So, in the early summer of five years ago, in the temporary office of Hangzhou Zero-Run Car, Zhu Jiangming told the Caijing reporter, "I want to start from scratch again and enter the intelligent car industry, so it is called Zero Run Car." "Interestingly, at that time, his first product, the soft film car, was all good, and he remembered to start doing marketing and media promotion.
In 2016, the policy of new energy vehicles changed dramatically. Not only do subsidy standards change year by year, but even the production qualifications of new energy vehicles are strict. On the eve of the interview, the National Development and Reform Commission and the Ministry of Industry and Information Technology suspended the qualification approval of new cars. At that time, Zhu Jiangming, who had already built a factory in Jinhua, said unabashedly that new energy needed industrial clusters, and if it was not done well by sprinkling pepper noodles on average, it would only leave zombie car shells in the end.
In the past few years, he has experienced a lot of doubts: hearing the evaluation of "you don't know cars, what kind of cars do you build", it is said that he has no sleep; three years ago, he heard people say that zero running can not live for more than a year. Faced with all this, he chose to "climb forward silently." ”
The experience of building cars in recent years has also made Zhu Jiangming have a lot of changes. In September 2021, when the "Caijing" reporter was interviewed at the C11 model launch, he became closer to the market, and he was willing to tell how he almost vomited blood financially because of the preferential pricing in the short film of station B; he was also willing to leave a gimmick that could be titled in front of the media - surpassing Tesla in three years. From 2B to company sales, to 2C directly facing consumers, Zhu Jiangming accepted to face the flash to help build the company's image.
Beyond Tesla's words, the Caijing reporter heard it in that interview four years ago. "We will definitely surpass Tesla in the future." China's national conditions are special, some systems rely too much on lane line recognition, domestic roads are always dug, and if they can't be identified, they will fall into the pit. In his view, with China's tolerance and rich scenes for autonomous driving, coupled with Dahua's technology, he has always been quite confident.
Judging from the prospectus, Zhu Jiangming, Wu Baojun and Cao Li are executive directors in the list of the board of directors of Zero Trotting Automobile; Jin Yufeng is a non-executive director; and Fu Yuwu, Huang Wenli and Wan Jiale are independent non-executive directors.
Although the board list does not have Fu Liquan's name, he holds 9.01% of the shares of Zero-run Automobile, second only to Zhu Jiangming. In 1993, 26-year-old Zhu Jiangming took 5,000 yuan and co-founded Dahua Shares with Fu Liquan, which later developed into the second largest giant in the security field.
President Wu Baojun worked at Gaz Motor Honda and GAC Toyota, and was the chairman of Zhongcheng Auto Insurance Co., Ltd. before joining Zero Run. In addition to using years of experience in automobile marketing to boost zero-run sales, Wu Baojun received an important task from Zhu Jiangming to help zero-run complete capital operation before he took office.
"Going public is not a means of wealth realization, but a means of raising more money for early-stage development companies." Wu Baojun once told the "Finance" reporter that in the early days, Mr. Zhu believed that it was enough to rely on the income of Dahua every year to invest zero runs, and now the rapid development of zero runs needs to leverage more capital to complete the strategic planning.
Nowadays, the team of zero-run cars has gradually been built. Whether it is the executives of the veteran car-making enterprises in Hangzhou, or the industry analysts in the interview with the "Caijing" reporter, they all praised Zhu Jiangming's vision and persistence.
How far can an A0-class car go?
For the rapid growth of recruits in this new car-making force, there are two major doubts in the industry.
First, can the performance of A0-class cars dressed up be sustained?
In 2021, a total of 43,748 electric vehicles were delivered by Zero Run, an increase of 443.5% over 2020. Among them, T03 is still the main sales force, delivering 38,500 units in 2021, accounting for nearly 90% of total sales.
T03 is an A0-class pure electric car, this model is very popular with consumers because of its preferential price, legal on the road, not afraid of restrictions, and lower cost of use; for manufacturers, it can quickly sell in quantity, earn new energy vehicle points, obtain financial subsidies, and reduce costs. Therefore, in the past few years, it has been a pioneer in the growth of new energy vehicle sales.
With some cities in China subject to traffic pressure, no longer give cars new energy vehicle licenses; new energy vehicle credits are declining year by year; in addition, China's local consumer market generally does not respect high-value-added boutique small cars, which leads to small cars need to win with cost performance. This will not only become a burden for the future brand to upgrade upwards, but also limit the ceiling of vehicle intelligence because of the price.
In response to this situation, Zero Run gradually enriched its own brand line and began to attack upwards. C11 models are gradually starting to be introduced, and from January to February 2022, a total of 10,300 zero-run vehicles will be delivered.
Second, what is the strength of research and development?
Based on the prospectus, zero-run expenditure in the field of research and development is not high. From 2019 to 2021, the R&D investment of zero-run vehicles will be 358 million yuan, 289 million yuan and 740 million yuan respectively. This makes some people worry about its independent innovation ability.
Also according to the prospectus, R&D personnel account for a high proportion of total employees. By the end of 2021, 1,082 of its 3,190 full-time employees were R&D personnel, more than one-third.
When talking about how zero-run can single-handedly pick Tesla, Zhu Jiangming once explained to the media: "Unlike other new car-making forces, only zero-run is the entire intelligent driving system from hardware to software all developed by itself. He also gave an example, all electronics-related products, zero-run cars are built from the resistance, while other brands are more mainly used for applications and algorithms.
From the perspective of product functions, the advantage of global self-research is that the interconnection of components is very convenient. On the zero-run car, the MCU (micro-control unit) tries to choose a brand, and a large number of hardware can be upgraded remotely, which saves the comprehensive cost of coordinated adaptation of different products.
In addition, in the field of visual recognition, Zero Run tries to base on the advantages of Dahua shares, such as professional technology, engineer team and so on. This technical input may be one of the reasons for significantly reducing the cost of zero-run car research and development.
In the prospectus of Zero Run, Zero Run spoiled a large number of new technologies and new plans in advance, including a new electronic and electrical architecture that determines the level of intelligence of the car; a high-performance and OTA upgraded electric drive system; and with the delivery of C01 in the third quarter of this year, Zero Run is expected to become the world's first new car manufacturer to adopt battery chassis integration (CTC) technology in mass production models.
Compared with the battery chassis integration, for example, this can not only efficiently use the chassis space, install more batteries, improve the mileage, but also make the cockpit space larger and the driving experience better. This is also the technical track of the radial influx of domestic car companies.
Left-handed technology, right-handed orders, once successful, this will make the enterprise have a strong competitiveness. For example, as soon as the C01, which is particularly richly equipped, was unveiled, it won the title of "price butcher" in the pure electric SUV market of 150,000 to 200,000 yuan.
In Wu Baojun's view, business is the most accessible area of interests, in the past few years, consumers who buy high-end brands have no shortage of curiosities, and consumers who buy low-cost electric vehicles pay attention to the economy of use, which is the most easily captured customer base at the beginning of the popularization of new energy. Today, more ordinary consumers will use electric vehicles as a car purchase option.
"The research and development of zero-run new cars will expand from the C platform to both ends, and the overall car price will be cheaper." Wu Baojun said that the follow-up zero run will expand the product platform to cover more models in the price range.
