Since the second half of 2021, the new forces have shown a lack of staying power. NIO (09866. HK，NIO. US) and Xiaopeng Motors (09868.HK, XPEV. US) shares fell 33.05 percent and 46.10 percent in just three months.
At the same time as the stock price fell sharply, it was the doubling of automobile deliveries and revenue, as well as the continuous replenishment of new cars and new production capacity, and there was also a clearer goal to turn losses into profits.
In the face of the relentless suppression of the capital market, should we believe in the emotionalization of capital or the value judgment of fundamentals? This is a question that has repeatedly aroused deep thinking since the birth of the capital market. Since there is no solution to this debate, let's see if the fundamentals stand up to scrutiny.
Weilai and Xiaopeng have announced the 4th quarter of 2021 and the annual results of 2021, there are surprises, there are joys, there are common problems that need to be faced, there are also their own development directions, Xiaopeng who came after the second half of the year, and the big brother Weilai, who retreated third, how far is the gap?
Comparison of business performance
In 2021, NIO did not deliver new models, and due to global supply chain problems, it also dragged down its overall car delivery level, resulting in its deliveries in the second half of the year seriously lagging behind Xiaopeng and Ideal Automobile (02015. HK，LI.US）。
In the fourth quarter of 2021, NIO's vehicle deliveries increased by 44.26% year-on-year to 25,000 units, while quarterly deliveries of ES8, ES6 and EC6 increased by 16.62%, 60.81% and 46.17% year-on-year to 5,683 units, 12,180 units and 7,171 units.
For the whole year of 2021, NIO's deliveries increased by 109.09% year-on-year to 91,400 units, while the annual deliveries of ES8, ES6 and EC6 were 20,000 units, 41,500 units and 29,900 units, respectively, up 84.61%, 48.41% and 507.58% year-on-year.
In the first two months of 2022, cumulative deliveries of ES8 and EC6 declined, down 12.45% and 5.49% year-on-year, respectively, to 2,615 units and 4,612 units, offset by strong growth in ES6, which increased by 73.34% year-on-year to 8,556 units, resulting in total deliveries in the first two months of WEIO increasing by 23.28% year-on-year to 15,800 units.
Xiaopeng launched the P7 and G3 revamps in 2021, and delivered the P5 from September 2021, so the delivery volume growth is bright, far better than Weilai.
In the fourth quarter of 2021, the delivery volume of existing models G3 (including G3i, the same below) and P7 increased by 188.21% and 150.29% year-on-year, respectively, to 12,800 units and 21,300 units, while the P5, which only started deliveries in the third quarter, increased by 3023% from the previous quarter to 7,621 units, with the total delivery volume increasing by 222.05% year-on-year to 41,800 units, which is 1.7 times the total delivery volume of Weilai in the same period.
In 2021, Xiaopeng's G3 and P7 deliveries increased by 1.481% and 302.13% year-on-year, respectively, to 29,700 units and 60,600 units, while the delivery volume of the new model P5 was 7,865 units, and the total delivery volume for the whole year increased by 262.99% year-on-year to 98,200 units, which is 1.1 times that of Weilai.
In the first two months of 2022, Xiaopeng's G3 model deliveries fell 9.75% year-on-year to 2,815 units, while the P7 maintained strong growth, up 100.12% year-on-year to 10,200 units, and P5 deliveries were 6,088 units, with a total delivery volume of 132.42% year-on-year to 19,100 units, 1.2 times that of Weilai.
Round 1: From the perspective of business volume growth, Xiaopeng clearly outperformed Weilai.
Performance comparison
Thanks to the super peer performance of the delivery volume, Xiaopeng's revenue performance in the corresponding period also saw a breakthrough.
In the fourth quarter of 2021, Xiaopeng's automobile sales revenue increased by 199.30% year-on-year to 8.187 billion yuan (unit RMB, the same below), gross profit margin increased by 4.11 percentage points to 10.87%, total revenue increased by 200.07% year-on-year to 8.556 billion yuan, and the overall gross profit margin increased by 4.58 percentage points to 11.96%. The increase is far greater than that of NIO.
The annual performance was the same, Xiaopeng's automobile sales revenue increased by 261.33% year-on-year to 20.042 billion yuan, while Weilai increased by 118.47% year-on-year to 33.17 billion yuan.
However, in terms of gross profit margin, the profitability of Xiaopeng Automobile's sales has not yet kept up with Weilai, and the gross profit margin of automobile sales in the whole year is only 11.52%, and Weilai has stepped into the 20 mark, reaching 20.06%.
In terms of operating expenses, Weilai and Xiaopeng, who paid attention to marketing in the early stage, invariably shifted their focus to research and development, and it can be seen from the data that the increase in research and development expenditure has exceeded marketing and administrative expenses.
However, from the perspective of the annual data, relative to the scale of revenue, Weilai's research and development is not fierce enough, which should be the company's emphasis on this year will be its research and development year at the recent performance conference, and said that it will double the R & D expenditure, significantly increase the reason for the development of R & D personnel, for details, please refer to the "[super material] conscience domestic goods can not withstand the rise of raw materials? Weilai has a saying! " article.
Due to the superior gross profit margin of the automobile sales business, Weilai's ability to reduce losses is also better than That of Xiaopeng, and the adjusted net loss for the whole year of 2021 fell by 41.24% to 3.007 billion yuan, compared with Xiaopeng's net loss expanded by 49.85% to 4.483 billion yuan.
Round 2: From the perspective of profitability and loss reduction ability, WEIlai has to win.
Comparison of distribution point and charge-and-swap networks
NIO currently has 46 NIO centers and 341 NIO spaces, covering 155 cities around the world. It has 60 NIO service centers and 179 authorized service centers in 146 cities in China.
NIO said it will continue to expand its sales and service network in China, and plans to add no less than 100 new sales outlets and more than 50 NEW NIO centers and authorized service centers in 2022.
In terms of charging and replacing network: NIO has built 866 substations, covering 190 cities in China, completing more than 7.6 million power exchanges, and deploying more than 711 supercharge stations and 3786 destination charging piles across the country.
In 2022, WEIO will deploy 30 power Up Plan destination power-up routes, and the Chinese market will have built more than 1,300 substations, 6,000 supercharge piles, and 10,000 destination charging piles, and continue to lay out in the charging and replacing network to further enhance the user's power-up experience.
By the end of 2021, Xiaopeng's physical sales network continued to expand, with a total of 357 operating stores covering 129 cities, including 209 directly operated stores and 148 authorized stores.
At the performance conference, Xiaopeng said that in 2021, the strategy of laying out channel sinking to grasp the demand and growth opportunities that broke out in non-first-tier cities, by the end of last year, Xiaopeng's sales points outside first-tier cities had accounted for nearly 80%, basically deployed at the end of last year or the second half of the year. Xiaopeng said that in 2022, it will continue to improve the network layout and improve store efficiency.
In terms of charging network, as of January 17, 2022, Xiaopeng Automobile's brand supercharging stations have reached 813, covering 337 cities across the country. Xiaopeng said that from the second half of 2022, the next generation of supercharging will be deployed, greatly shortening the charging time of users and strengthening the layout of charging facilities along the highway.
The third round: In the battle for the layout of the point of sale and charging and replacing, Weilai and Xiaopeng may have their own emphases and strategic bases, the former pays attention to service quality and power exchange experience, biased towards first-tier cities, and the latter extends the front line to the sinking market. It's a tough round.
Overseas expansion comparison
Weilai and Xiaopeng both took the lead in laying out the Norwegian market and extended their front to other European countries.
Nio will lay out the domestic service system to the European market, at the performance conference, the company said that the product and the whole system of services will be officially landed in Germany, the Netherlands, Sweden, Denmark in 2022, the current team formation and related market entry preparations are progressing smoothly.
Xiaopeng's first direct-operated experience store in Europe has officially opened in Stockholm, in addition, in February 2022, it announced that it had reached a cooperation agreement with the European leading dealer group, using the mature experience of the overseas dealer system to help Xiaopeng Automobile layout overseas markets.
Round 4: Initial involvement in overseas markets, to be inspected later.
Prospect comparison
Weilai, which lags behind in 2021 because it did not push new models, will make a comeback in 2022, delivering three brand new models based on the NT2:
1) The FIRST MODEL, THE7, BASED ON NIO's second-generation technology platform, the NT2, has been delivered on March 28 and will be equipped with NAD, an autonomous driving platform developed by NIO, and is expected to launch subscription services in the fourth quarter sub-region.
2) At nio DAY in December 2021, NIO released the MID-size smart coupe ET5, equipped with NIO's autopilot system NAD, and NIO's panoCinema, a digital cockpit with AR and VR technology, which is expected to start delivery in September this year.
3) NIO will also release the ES7, the first SUV model based on the NT2, in the near future, which is positioned in the mid-to-high-end five-seat SUV market and is scheduled to start delivery in the third quarter of this year.
In addition, NIO also plans to enter the mass market, or focus on the price of $30,000 (about 190,000 yuan) to $50,000 (320,000 yuan), but only if there is enough gross profit and will not sacrifice gross profit to enter the market. At present, the relevant core team has been completed, the strategic direction and development plan have been clarified, and the first batch of products has entered the key research and development stage.
Xiaopeng launched its flagship five-seat large and medium-sized SUV G9 at the Guangzhou Auto Show on November 19, 2021, which has rolled off the production line at the factory and is expected to be officially launched in the third quarter of 2022. At the performance conference, Xiaopeng management said that P9 represents the highest level of research and development of Xiaopeng Automobile in the past few years to adhere to the autonomy of software and core hardware.
Xiaopeng also revealed at the performance conference that it plans to launch the first model of two new model platforms (one product for each platform) in 2023, one for C-class cars and the other for B-class cars, both supporting XPILOT 4.0 - Xiaopeng will launch a self-developed driving assisted driving system in 2023.
In terms of production capacity, the current production capacity facilities of Xiaopeng mainly include 150,000 units of Haima Factory and 100,000 units of Zhaoqing's own plant.
However, capacity expansion is on the arrow: Xiaopeng and Guangzhou Kaide Investment have reached a cooperation agreement, the latter will build a smart electric vehicle production base according to Xiaopeng's requirements, planned to be put into operation in December 2022, with a production capacity of 100,000 vehicles; Xiaopeng has also signed a cooperation agreement with Wuhan City to build an electric vehicle production base with an annual production capacity of 100,000 vehicles; in addition, Xiaopeng will carry out the second phase of the expansion project of the Zhaoqing plant, after completion, the production capacity of the Zhaoqing plant will be doubled to 200,000 vehicles.
At the performance meeting, Xiaopeng management revealed that it can adjust the production volume by adjusting the working hours, and believes that it has the ability to expand the production capacity of a specific single factory to more than 500,000 vehicles in a relatively fast time.
Weilai said that the capacity upgrade of its Jachuai Weilai plant is in the process of phased advancement, and it is expected that the production capacity of the entire production line will be increased to 60JPH (hourly workload) in the middle of the year. Located in Hefei Xinqiao Electric Vehicle Industrial Park, the plant construction and equipment installation have been basically completed, the commissioning work is progressing smoothly, the second production base is planned to have a production capacity of 60JPH, which is scheduled to be officially put into operation in the third quarter of this year, and the first model produced is ET5.
Jianghuai factory can reach 60JPH in the middle of the year, Hefei factory is also planned according to 60JPH, but there is a climbing process, if according to 60JPH, double shift 4000 hours, production capacity or can reach 240,000 vehicles, about 20,000 vehicles / month; if overtime more, such as 5000 hours, production capacity or up to 300,000 vehicles.
Therefore, the company expects that the vehicle production capacity is expected to have a fundamental improvement in the second half of this year (the fourth quarter). However, it should be noted that NIO's new model ET7 is produced at the JAC plant, that is, it is produced in tandem with the existing models ES8, ES6 and EC6 - not only to ensure the production capacity of the three existing models, but also to cope with the mass production of the new ET7 and prepare for the mass production of the ES7, and the early production rate of the ET7 at the JAC plant will be a little slower than that of the ET5 produced at the Hefei plant, or it will not reach the conventional production capacity until the third quarter.
Battery production capacity: Weilai said that the bottleneck is also there, last year began to increase the production line, this year from the current point of view, battery production capacity should be able to meet its needs.
Round 5: As far as new models are concerned, WEIlai is aimed at the high-end market with smaller pricing and higher prices, and there are plans to open up the mass market to expand the product portfolio, or it may look at the high line.
Profit predictability
NIO's Q1 2022 guidance shows that deliveries may be between 25,000 and 26,000 units, less than Xiaopeng's 33,500-34,000 units, but due to its higher vehicle pricing, the revenue guidance range is between 9.631 billion yuan and 9.987 billion yuan, higher than Xiaopeng's 7.2-7.3 billion yuan.
At present, the new forces are all operating at a loss, and their ultimate goal is to turn losses into profits, and to turn around losses, the first thing to do is to improve the gross profit margin level of the automobile sales business.
At the results conference, Xiaopeng management expects that its profit margins in the first and second quarters may be the same as in the fourth quarter, and with the release of the price increase effect and the delivery of new models, it is expected to have the ability to cover costs, and the profit margin in the second half of the year may be better than that in the first half of the year.
However, from the above performance comparison, it can be seen that although Xiaopeng's automobile sales revenue has expanded significantly, the gross profit margin level is less than 60% of Weilai, and Weilai seems to be closer to "going ashore" (turning losses).
The gross profit margin target given by NIO is also more pragmatic, and its gross profit margin target for vehicle sales this year is 18%-20%, considering that the gross profit margin in 2021 has reached 20.06%, this goal seems to be difficult to achieve. In addition, WEILAI also gave a time target to turn around the loss - to reach break even in the fourth quarter of 2023 and achieve profitability for the whole year of 2024.
XiaoPeng is a bit vain. At the results conference, the overall gross profit margin target given by management in the medium to long term (also including the higher profit service business) was to increase to more than 25%. Considering that Xiaopeng's overall gross profit margin in 2021 is only 12.50%, this goal seems to be expected to be achieved only in the medium and long term.
Round 6: Avoiding the void and becoming more realistic, NIO's profit prospects are more predictable.
Valuation comparison
He Xiaopeng said at the performance conference: Entering 2022, Xiaopeng's products continue to be in short supply.
In order to accelerate the delivery of a large number of on-hand orders brought from 2021 and new orders this year, it completed the technical upgrade of the Zhaoqing factory during the Spring Festival, and through the adjustment of sales and delivery cycles, in late February and early March, new orders quickly returned to the best level of the peak season in December last year.
From March 21, Xiaopeng raised the price of all products by 10,000 to 20,000 yuan to cover the recent increase in battery and raw material costs.
Weilai said it would not raise the price of existing models, but would raise prices for the redesigned cars launched this year.
Faced with a shortage of chips, high costs of batteries and other raw materials, and an environment where the epidemic has repeatedly led to production plans that have not reached their targets, the situation of the new forces is actually inseparable from each other.
However, optimistically, with the rise in oil prices, consumer demand for new energy vehicles or sharp increase, which should be conducive to new forces. However, the author believes that there are two sides to the problem, at the time of the rise in the price of fossil fuels, coal-fired electricity prices also have upward pressure, and whether pure electric vehicles can effectively reduce consumption costs may also depend on the comprehensive substitution of electricity prices and new energy.
Overall, judging from the fact that WEIlai and Xiaopeng plan to raise prices while orders are still growing strongly, the new forces have the ability to pass on the increased costs to consumers. Xiaopeng management said at the performance meeting that chip shortages, raw material price increases, etc. are temporary problems, fast is one quarter, slow is about three quarters, and the material will change to a certain extent.
The author believes that if these problems can be solved in the next three quarters, THE delivery volume of NIO and Xiaopeng this year should be greatly improved, so that the growth of its automobile sales revenue should be maintained.
From the above comparison of the two new forces, it can be seen that in terms of profitability, NIO is slightly better than Xiaopeng; in terms of business outlook, NIO's three new models are expected to bring greater growth drivers, and sales performance in 2022 may be able to catch up later. From the perspective of price-to-sales ratio valuation, the valuation of Weilai's Hong Kong stocks is slightly lower than that of Xiaopeng, see the table below.
On the whole, whether in the consumer market or the capital market, Weilai will win a big victory in regaining the new power in 2022.
Mao Ting