Seeking an independent listing, Porsche accelerated its popularity

Recently, volkswagen group issued a statement saying that Volkswagen and the board of directors of Porsche Holdings (SE) have reached a framework agreement to ensure that Porsche (AG) will be listed independently.

The entanglement between the public and Porsche, from the feud of the giants to the classic case of the MBA, the ups and downs of the plot, the brain of the domestic drama screenwriter is simply difficult to fiction.

Back in 2018, Porsche CFO Maxger first proposed the idea of an independent IPO, saying it could unlock value and replicate Ferrari's successes from years ago.

Today, volkswagen in the electrification trend of "ship difficult to turn around", Porsche urgently need to enhance the value, light loading, at this time the old things are revived, beneficial to both sides.

1

Porsche's flexible turn

An absolutely strong luxury car brand, Porsche in the 20th century was considered to be one of the world's top three sports car manufacturers along with Italy's Ferrari and later Britain's McLaren.

However, the traditional constraints on Porsche are not obvious, and Porsche's performance in the Chinese market shows that it can always see changes in the automotive industry and change accordingly, which is also an important reason why Porsche's sales and profitability are far superior to other luxury car brands.

Although countless luxury brands want to be younger, porsche brand rejuvenation is undoubtedly the most successful.

Official data shows that the average age of Porsche consumers in Germany is 53 years old, and the proportion of male consumers reaches 70%-80%. In China, the average age of Porsche consumers is only 35 years old, and the ratio of men to women is 1:1.

In the social platform where major young people gather, Porsche is also highly sought after by young people, and its exposure far exceeds that of other luxury car brands.

Porsche has seized the trend of SUVification of luxury car brands and achieved explosive growth of SUV models.

In early 2002, the Cayenne was unveiled at the Geneva Motor Show, the first SUV model introduced by Porsche, and in 2013, Porsche introduced the Macan compact SUV. To this day, the two SUVs still hold an absolute leading share of their sales.

Its investment in electrification is also ahead of other luxury car brands. Under the tide of automobile electrification, Porsche is one of the few luxury car brands that has successfully transformed.

Compared with the slow progress of parent company Volkswagen in the electric vehicle market, in 2021, Porsche electrified models will account for 18% of new car deliveries, an increase of 8 percentage points over the previous year, ranking first among traditional luxury car brands.

Since the launch of its first pure electric sports car, the Taycan in 2020, Porsche has opened the road to pure electricity in the Chinese market. Currently, the Porsche China Electrification family offers 16 models (all-electric and plug-in hybrid) and it is planned that by 2025, 50% of Porsche's new deliveries will be pure electric or plug-in hybrid models, and by 2030, this proportion will reach 80%.

"I'm sure there are some customers who value connectivity, digital configuration and electric drive, and they can't find what they want in the Porsche product line and turn to Tesla." In November 2017, Klaus Zellmer, CEO of Porsche North America, told the media.

Seeing the trend towards electrification and intelligence, according to the plan, in 2021-2021, Porsche will invest 10 billion euros in the field of electrification, of which 6 billion euros will be used for the research and development of hybrid and electric vehicles, 3 billion euros for investment in electrified tangible assets, including plant renovation and expansion related to the production of electric vehicles, and another 1 billion euros for digital transformation, such as the development of highly autonomous driving platforms.

The media predicts that this is also an important reason for Porsche's separate listing.

2

What is Porsche's market capitalization?

Some media predict that if Porsche Is finally listed independently, it will be valued at between 60 billion and 85 billion euros (425 billion yuan to 602.3 billion yuan), which may become the largest IPO in European history.

How is Porsche valued?

According to the latest financial report released by the Volkswagen Group, as of the first three quarters of 2021, Porsche pre-tax earnings were 3.356 billion euros, generating a pre-tax profit of 3.4 billion euros, equivalent to more than 24 billion yuan, accounting for 34% of the pre-tax earnings of the Volkswagen Group's automotive business.

With high profitability and a successful turnaround in the trend towards electrification, Porsche has always been bullish on the market.

Tesla, which has annual sales of nearly one million, has a net profit of 5.5 billion US dollars, and Tesla's gross profit margin of nearly 30% is far more than that of other car companies. Different valuation logic, in the leading position of the trend of car electrification and intelligence, Tesla's market value of $866 billion has left traditional car companies far behind.

In contrast, Porsche has annual sales of 300,000 euros, net profit of 4.2 billion euros (2020 data), and a gross profit margin of about 16%.

Luxury brands or technology brands mean completely different valuation ranges. The long-term growth potential of technology brands, especially Tesla's continuous investment in platform construction and technology research and development, indicates its relatively certain market future. The spending power of high-net-worth individuals of luxury brands is huge, but the scale of growth is limited.

From the beginning, Tesla has taken a unique path, cutting from the luxury car market and encroaching on the original luxury car market with a new technical route. In 2020, Bloomberg published a survey of "models abandoned for the Model 3", surveyed 5,000 Model 3 owners and found that the brands most impacted by the Model 3 were: BMW, MINI, Audi, Acura, Infiniti, Porsche, Lexus, Mercedes-Benz.

In 2021, Tesla's sales increased by 87.4% year-on-year. Porsche delivered 301,915 units worldwide, an increase of 11% year-on-year, with Porsche's first pure electric sports car, the Taycan, delivering 41,296 units, more than double the year-on-year.

One is deterministic future growth, and the other is the high moat of the stock market. On the face of it, Porsche's valuation will depend on how far it goes on the electrification route.

3

Can electrification make Porsche earn more?

According to the 2021 global new energy brand sales data released by the CleanTechnica website, the cumulative sales of new energy models in the world in 2021 will be nearly 6.5 million, an increase of 108% over the same period last year. In contrast, the total global automobile sales table is about 80 million, and new energy vehicles account for less than 9%.

Professor Zhao Fuquan, dean of the Institute of Automotive Industry and Technology Strategy at Tsinghua University, once said that the penetration rate of new energy vehicles is not a simple line of gradual progress, from 1% to 5% is very slow, but from 15% to 30% is very fast, which is related to technological maturity, consumer psychology, infrastructure and so on.

New energy vehicles have an expected broad market, which is also an important reason for the ultra-high valuation of new energy vehicle companies represented by Tesla.

However, from the perspective of the mainland market, models below 150,000 yuan account for 64%. This means that price is still an important reason for restricting the expansion of the electric vehicle market.

Looking at the sales of Porsche's models, it is not difficult to find that Porsche's More than 500,000 yuan Macan sold 88,000 units, followed by the Cayenne with a minimum price of 910,000 units, with a cumulative sales of 83,000 units. Users still want Porsche, and if it's electric and cheaper, there's nothing wrong with it.

The earliest entry into electrification is the body that Porsche continues to put down, and it is also the user group that Porsche continues to expand. On the one hand, the high-end of electric vehicles, on the other hand, the luxury car brand is backward compatible. Luxury car brands with the label of Fast and Furious have begun to harvest leeks towards the largest middle class.

Judging from the user profile, 72% of Taycan users are the first to buy a Porsche model, and generally have a high income and education background. Porsche's increase in the electric vehicle market has expanded new consumer groups for its brand.

In terms of sales, Porsche pure electric sports cars increased sales by about 26,000 units, while the brand increased by about 30,000 units. Conventional fuel models recorded only 4,000 volume growth, and electrification at this time is the inevitable road. Whether it is for a broader market or to maintain the original market share.

The people-friendly price also brought Porsche higher sales.

Porsche's goal is to have 50% of new cars delivered by 2025 being electrified and 80% by 2030, which in fact means high sales and high earnings.

In the Little Red Book app, Porsche is the most common luxury car brand. According to statistics, there are nearly 170,000 Porsche planting notes in the Little Red Book app, far exceeding brands such as BBA and Toyota Volkswagen, and far exceeding luxury car brands such as Maserati and Ferrari.

However, in the luxury market, "close to the people" is a damage to the brand.

The Porsche brand moat is still in place, but the growth of high net worth people in the moat is far less than expected. Luxury cars are getting better and better, With Ferrari's global sales surging 22.3% year-on-year in 2021 and bentley brand sales reaching 14,659 units in 2021, up 31% year-on-year compared to 2020.

Porsche's electrification of the steering is more conducive to Porsche's brand segmentation. Electric vehicles are low-cost, close to the people, and at the same time high profits, while traditional fuel models maintain luxury attributes and give electric vehicles the ability to brand. From this point of view, Porsche is undoubtedly a success.

Porsche, which has become an internet celebrity, has also triggered discussions among netizens about whether it is an ultra-luxury brand. Under the Porsche, the decline of the brand tone, or to a broader market, Porsche has made a choice.

And the independent listing will escort Porsche to go faster!

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