Behind the new forces of car-making rushing to Hong Kong for listing: grabbing the track leader and financing is "life-saving money"

Reporter Gong Mengze

Since 2022, new car-making forces, including Weilai, Weima, Nezha, Zero Run, Gaohe and Xilisi, have begun to compete to "catch up" the capital market. As the first NIO to be listed in the United States, it announced its second listing on the Hong Kong Stock Exchange on March 10 this year.

Coincidentally, as a new car-making force that realized delivery earlier in China, on March 17, Zero Run Automobile submitted a listing application to the Hong Kong Stock Exchange. According to the reporter's incomplete statistics, as of now, zero-running cars have received investment from financial and industrial investors such as Sequoia China, Shanghai Electric, and CRRC, with a total amount of nearly 10 billion yuan.

Also planning to go public in Hong Kong is Nezha Automobile. Although Zhang Honghan, deputy general manager of Nezha Automobile Brand Center, was silent about the Securities Daily reporter when asked about the IPO in Hong Kong, according to Tianyan, the company to which the Nezha brand belongs, Hezhong New Energy, just completed a new round of financing of more than 2 billion yuan in February this year. Many sources speculate that after the completion of the D series financing, Nezha Automobile, which is valued at more than 25 billion yuan, will most likely launch an IPO in Hong Kong within this year.

According to the reporter's observation, the above round of financing and the operation of landing in the capital market have clear capital uses and medium- and long-term plans, and a big battle is waiting for the new forces of car manufacturing and the capital behind them.

Financing channels are tightening and tightening

Listing in Hong Kong has become a realistic choice

"In the early days, Chinese companies had diverse motivations to go public in the United States, and financing was only one of them, and more companies aimed to take advantage of the differences in listing conditions to seek greater development space and freedom." Some automotive industry securities analysts who did not want to be named told reporters that taking the new forces of car manufacturing as an example, they must be loss-making in the early stage of operation, and they are also the most in need of capital incubation, and the US stock market is more tolerant of this.

In addition, "the market valuation is high, the liquidity is good, especially the US stock market allows the same share of different rights, so that the founders of the company retain more voting rights that are not equal to the proportion of equity, and also prompt a large number of Chinese companies, including new forces, to go public in the United States." The above analyst said. However, since 2019, the US restriction policy on Chinese stocks has gradually increased. Especially in April 2020, after Luckin Coffee exposed financial fraud, the crisis of trust led to the peak of accusations against Chinese stocks, and short selling followed.

Fortunately, the emergence of the science and technology innovation board during this period has given hope to many technology companies, including new power car companies. Among them, WM was once considered to be expected to rank among the first shares of new energy vehicles on the science and technology innovation board. At the beginning of February 2021, WM Motors had the conditions for counseling acceptance and listing on the Science and Technology Innovation Board. In July last year, Shen Hui, founder, chairman and CEO of WM Motor, revealed in an interview with the Securities Daily reporter: "The progress of the listing is not up to you, but I hope that the sooner the better." However, after months of waiting, WM did not even comment on the claim that the company had chosen to abandon its listing application.

After the defeat of the WM Science and Technology Innovation Board, Geely Automobile, the leader of domestic independent brands, took over the baton, but it was equally disappointed. In fact, after the science and technology innovation board increased the qualification review of the "hard technology" of the applicant enterprises, it blocked many new forces of waist car manufacturing and powerless enterprises that vainly tried to turn around through the concept of "car building".

At the same time, "Wei Xiaoli" has become more energetic in seizing the limelight of the capital market, and has successively gone to the United States to list and even return to Hong Kong for a second listing. At this time, there are still funds and traffic in hand, and the second-tier new forces that intend to develop and grow will turn their attention to the IPO in Hong Kong.

"Redirecting" the rapid growth of the Hong Kong Stock Exchange

Bet on the domestic new energy vehicle track

It is indeed a better choice for new car-making forces to go public in Hong Kong, but some investors have expressed concerns. As a pure offshore market, Hong Kong stocks are limited in volume, and it is difficult for new car-making forces to obtain the recognition of their due value.

In this regard, Gao Yunpeng, director of the China New Energy Automobile Industry Innovation Alliance, believes that the top priority of the new forces is financing, and the main means of financing is to find direct investors. Hong Kong stocks are rich in financial instruments, and after the successful listing, the company can directly raise funds through bond issuance, capital increase and other means. The new forces and the capital behind them are competing to grab the capital market, and the driving force of continuous "tossing" comes from the optimism and certainty of China's new energy vehicle companies in the future.

"Securities Daily" reporter checked the data of Tianyancha that between 2006 and 2021, there were about 550 financing incidents in the field of new energy vehicles in China, with a total amount of more than 320 billion yuan. From the perspective of registration time, more than 80% of enterprises have a registration period of less than 5 years. It is foreseeable that the sales of new energy vehicles will continue to rise in the next few years, and it is still the most promising investment area.

According to data released by the China Association of Automobile Manufacturers, in January 2022, the production and sales of new energy vehicles reached 452,000 units and 431,000 units, respectively, with a market penetration rate of 17.0%. Looking ahead to 2022, how many new energy vehicles can China sell? The answer given by the China Automobile Association is 5 million vehicles, an increase of 42% year-on-year, and the market share is expected to exceed 18%; while the Association of Automobile Manufacturers has given a more optimistic prediction, with the opportunity to break through 5.5 million vehicles and achieve 70% ultra-high growth.

Gao Yunpeng believes that automobiles are bulk consumer goods, and listing will bring wider communication and popularity to the brands of car companies, get more policy support, and stimulate sales to rise. More critically, the development of new forces needs more standardized and clear planning to effectively promote enterprise self-innovation.

Collective losses of new forces became the norm

Listing financing has become a necessary option for survival

Although the prospects for the new energy automobile industry are picturesque, a real problem that cannot be ignored is that Tesla, the global electric vehicle leader, also achieved profitability for the first time in 2020 after 15 years of losses. The domestic car-making new force TOP3 "Wei Xiaoli" has not yet gotten rid of the loss state.

According to the third quarter of 2021 financial report, Xiaopeng ranked first with a record net loss of 1.595 billion yuan, followed by WEILAI's 835 million yuan and the ideal 21.5 million yuan; on the annual delivery side, Weilai reached 91,000 vehicles, Xiaopeng 98,000 vehicles, and the ideal 90,000 vehicles. According to the performance of Tesla, which has been profitable, overseas analysts will roughly set the turning point of getting rid of losses at 200,000 vehicles per year.

"The listing of new car-making forces in the US stock market can temporarily alleviate the demand for funds, but it is almost impossible to really make a profit through car-making in the short term." Zhang Xiuyang, secretary general of the China Passenger Car Industry Alliance, told reporters that the listing of new car-making forces has become a necessary option to broaden financing channels.

It should be pointed out that although the first landing on the capital market has the opportunity to run at the forefront of the track, even if it is successfully IPO, it is only the first step on the long "money" road. At the same time that the new car-making forces are exchanging money for scale and exchanging time for space, more competitors are also working day and night - including technology giants such as Baidu, Xiaomi, and Huawei, as well as traditional car companies that have accelerated transformation and exploration.

"The next three to five years will be the decisive moment for new energy pure electric brand cars." Before 2025, after the market elimination, market concentration and brand power, a million-level new energy pure electric brand will inevitably be born in the Chinese auto market, and there may only be a few new car-making forces that can survive. Zhang Xiuyang said.