"Harbor Business Observation" Wang Xinyi
The market seems to have a "car-making" fever, whether it is the entry of home appliance leaders or the listing of a number of new energy vehicle companies, which confirms this.
On March 10, 2022, NIO (9866. HK) landed on the Hong Kong Stock Exchange, which is the second return to Hong Kong after the listing of US stocks. China's new car-making forces gathered in the Hong Kong stock market to form a scene of three heroes competing for hegemony. A week later, on March 17, Zhejiang Zero Run Technology Co., Ltd. (hereinafter referred to as Zero Run Technology or Zero Run Auto) handed over the watch to the Hong Kong Stock Exchange, which means that soon, the Hong Kong Stock Exchange will usher in the fourth new force of car manufacturing.
Zero-run technology is known as the main R & D, however, behind the high-cost R & D investment has also brought potential risks, three years of cumulative loss of 4.8 billion, "income can not make ends", how to balance "research and development" and "make money" trade-off, is a problem in front of zero-running technology.
01
Research and development "leads", but quality problems are frequent
In December 2015, Zero Run Technology was established, the company claims to be a global self-developed and self-manufacturing capabilities of high-tech intelligent electric vehicle enterprises, the business scope covers intelligent electric vehicle design, R & D and manufacturing, intelligent driving, motor electronic control, battery system development and cloud-based networking solutions.
Zhu Jiangming, founder, chairman and CEO of Zero Run Technology, has publicly stated: "Global self-research is the core of the future and the key to winning. We achieve core competitive advantages through global self-research. In addition to the self-development of the drive assembly, the battery field has also developed from external battery cells to its own modules, packs and BMS (battery management systems), while the car system, cloud platform, intelligent driving, etc. have realized self-research. ”
Is the core competitive advantage that is so proud really "leading" the enterprise? From the perspective of revenue data, the performance of zero-running technology is good, and 2021 is considered by the market to be the outbreak year since the establishment of zero-running technology. During the Reporting Period, Zero Run Technology recorded revenue of $117 million, $631 million and $3,132 million, respectively.
As a highlight of Zero Run Technology, in 2019, 2020 and 2021, Zero Run Technology's R&D expenditure was 358 million, 289 million and 740 million, accounting for 306.4%, 45.8% and 23.6% of the total revenue respectively.
Such a high proportion of R & D investment, but the results seem to be some "accompaniment". The so-called advanced technology may not be mature in quality. In November 2017, zero-run technology's first mass-produced model S01 was unveiled, and at the beginning of the publicity, the model took some functions as the selling point of Tesla, but when the car reached the hands of consumers, there was a voice of doubt.
Due to the frequent failures of zero-run S01, such as brake system failure, main control screen full black, control system failure and other issues, 200 S01 car owners issued an open letter to Zero Run Technology on the day of the listing of Zero Run T03 in May 2020, hoping that Zero Run Technology would give an answer to quality issues.
(Image source: Weibo, @Zero Run Quality Report, partial screenshot)
In this regard, Zero Run Technology responded: "The quality of zero run technology vehicle products meets national standards, and failures are mostly occasional problems, not safety and quality problems." But in October of the same year, Zero Run Technology recalled 150 2019 Zero Run S01s.
(Source: China Automotive Quality Network)
Zero Run Technology has said that it will surpass Tesla in the field of intelligence within three years. At present, the zero-running technology that has achieved an impressive performance growth rate in 2021 is also enough to reflect the recognition of the market and consumers for the company's products to a certain extent. The advent of Leapmotor Pilot 3.0, Heracles or CTC is also like telling consumers that they can expect more from the company's R&D capabilities.
It is worth noting that Zero Run Technology disclosed in the prospectus: "The company provides automatic driving functions through Leapmotor Pilot (automatic driving system), and plans to continuously upgrade and improve automatic driving technology, equipping C11 with Leapmotor Pilot 3.0, providing 360-degree visual perception and 22 automatic driving functions including intelligent pilot assistance functions." ”
And automatic driving has always been a hot topic of concern in the car circle, how long will it take for automatic driving to achieve a real sense of "automatic"?
In August 2021, an accident occurred in NIO's ES8 car after activating the autonomous driving function (NOP pilot status). For this accident, the relevant person in charge of Weilai also specially reminded: "NOP is a driving assistance function, not automatic driving. "Can the automatic driving of zero-run technology break through research and development to create "automatic" driving under the principle of safety? There is still a market to be examined.
Bai Wenxi, vice chairman of the China Enterprise Capital Alliance and chief economist of IPG China, told Harbor Business Observation: "R&D investment is not necessarily rewarding if there is a payment, on the one hand, it may be a lack of R&D capabilities, on the other hand, it also shows that there is actually a great deal of uncertainty in the R&D work, and it may not be able to achieve the target of the appeal." R & D capabilities are an important part of the core competitiveness of enterprises, if the R & D strength is not enough, it is difficult to form the core competitiveness of enterprises. ”
02
Supplier concentration, increased delivery risk
Looking at the present, research and development has not yet "run" steadily, has a long-term goal but the strength is not enough, making the zero-run technology appear embarrassing, that is, the loss is constantly increasing.
Zero Run Technology, which has been in a state of loss for a long time, generated net losses of 901 million, 1.100 billion and 2.846 billion, respectively, and gross profit losses of 112 million, 320 million and 1.388 billion respectively during the reporting period. In other words, the total net loss of zero-running cars reached 4.847 billion yuan, and the total gross profit loss reached 1.82 billion yuan.
In terms of data, the loss of zero-run cars in 2020 and 2021 will continue to increase, especially in 2021, the loss will double.
It is worth noting that Zero Run Technology disclosed in the prospectus that it may not be able to generate sufficient revenue due to investment in future models, research and development of intelligent electric vehicle technology, production facilities and expansion of sales and service networks: "Net losses are expected to continue in 2022. ”
In the short term, the pressure of not being able to deliver the car may also be a factor in the loss. Zero Run Technology's total delivery volume for the whole year of 2021 increased by 443.5% year-on-year. However, this year, there have been many complaints about delivery problems. A search for zero-running cars on the Black Cat complaint platform led to 21 complaints in the last thirty days, all related to delivery issues.
Some professionals pointed out that due to the sharp rise in lithium and nickel prices and the shortage of supply, the supply of vehicle batteries is insufficient, affected by the shortage of supply of supporting battery manufacturers, many car companies in the industry will have delayed delivery.
But from the prospectus, zero-run technology has begun to have a trend of putting eggs in one basket. The main suppliers of Zero Run Technology are battery cells, automotive electronics suppliers and service providers. During the Reporting Period, the amount of purchases made by Zero Run Technology from the largest suppliers accounted for 5.4%, 21.4% and 19.1% of the cost of sales in those years, respectively. The amount of procurement from the top five suppliers accounted for 17.1%, 28.2% and 33.7% of the cost of sales in the same period, respectively. The gradual increase in the cost ratio will lead to an increase in risk exposure to some extent.
"The gradually rising proportion shows the company's dependence on the top five suppliers, which will bring about the risk of excessive concentration of suppliers, which needs to be gradually resolved in the future supply chain management with the moderate dispersion and diversification of suppliers." ”
The market level is not completely optimistic, Bai Wenxi on the valuation angle, believes that under the blessing of green energy, compared with Weilai and so on, as a new force in car manufacturing, zero-run technology may be higher: "Zero-run technology has played more new concepts involving green energy, thus gaining the pursuit of the market, but also the breakthrough direction of enterprises." For the start-up period or rapid development of scientific and technological innovation enterprises, the annual aggravated loss is normal, as long as the company's strategic direction is right, the market foundation is solid and rapid growth, under the blessing of capital, it is possible to gradually reduce losses and eventually achieve profits in the future. (Produced by Harbor Finance)