Zero-run car sprint IPO, can the glory of the T03 continue?

Zhongxin Jingwei, April 7 (Niu Chaoge Changtao) Recently, Zhejiang Zero Run Technology Co., Ltd. (hereinafter referred to as Zero Run Automobile) submitted a listing application to the Hong Kong Stock Exchange. If the IPO goes well, Zero Run Auto will become the fourth new car-making force to land in the capital market after Weilai, Xiaopeng and Ideal.

Financing of 12.06 billion yuan In the past three years, losses have gradually expanded

Around 2014, a new car-making force emerged in China. Because Weilai, Xiaopeng and Ideal took the lead in listing, the scale of enterprises and product delivery are in the first echelon, so the industry collectively refers to them as "Wei Xiaoli".

Zero-run cars, Nezha cars, Weima motors, etc. are in the second echelon after "Wei Xiaoli", and they are also eager to go public. It is reported that Nezha Automobile has opened a Pre-IPO round with a target valuation of about 45 billion yuan and plans to launch an IPO in Hong Kong in 2022. Weima, whose sales volume is relatively close to zero running in 2021, has planned to list on the science and technology innovation board as early as 2020, and the goal is to "the first stock of the science and technology innovation board car".

People in the industry generally believe that the success of the listing of zero-run cars will be directly related to whether they can highlight the siege and lead the second echelon.

According to the data of Tianyancha App, as of the day before, Zero-run Automobile has obtained a total of 7 rounds of financing, in addition to the angel round in 2016 and the equity financing in 2017, the amount of publicly disclosed financing has reached 12.06 billion yuan, and the investors include Sequoia China, CRRC, Hangzhou State-owned Assets, Shanghai Electric, etc.

Echoing the scale of financing of 12.06 billion yuan, the loss of zero-running cars has gradually expanded in the past three years. According to the data, the revenue of zero-running cars from 2019 to 2021 was 117 million yuan, 631.37 million yuan and 3.132 billion yuan, and the adjusted net losses were 810 million yuan, 935 million yuan and 2.629 billion yuan, respectively, with a total loss of 4.374 billion yuan in the past three years. According to zero-run cars, the loss in 2022 will continue.

However, for the new car-making forces, losses are not new. When facing losses, good cash flow is especially important. Compared with the listed "Wei Xiaoli", there is a gap in cash flow between zero-run cars and the listed "Wei Xiaoli". As of the end of 2021, Zero Run Auto held cash and cash equivalents of 4.338 billion yuan, compared with the ideal cash reserve of 50.16 billion yuan in the same period. As of the third quarter of 2021, NIO's cash reserves were 47 billion yuan, and Xiaopeng Automobile's cash reserves were 45.36 billion yuan.

For the new car-making forces, R&D investment is a criterion for evaluating their future development potential. The low investment in research and development is one of the reasons why zero-run cars are questioned by the industry. From 2019 to 2021, the R&D expenses of zero-run vehicles will be 358 million yuan, 319 million yuan and 740 million yuan respectively, totaling 1.417 billion yuan. In contrast, Weilai's automobile research and development expenses in the first three quarters of 2021 were 2.073 billion yuan. Xiaopeng Automobile has invested 2.663 billion yuan in research and development.

Can the glory of pin crown T03 continue?

So far, zero-run cars have launched a total of three models, namely S01, T03 and C11. In addition, zero-run cars are expected to start delivering the new C01 in the third quarter of 2022.

The first model of zero-run, the S01, is an electric coupe priced from 130,000 to 150,000 yuan, and will be delivered in July 2019. According to the data released by Zero Run, the sales of the first model S01 were dismal, and only 561 units were sold in the highest sales quarter, and by the end of 2021, the cumulative sales of the S01 in the two and a half years were 2705 units, with an average of about 271 units per quarter.

The second zero-run model, the T03, is priced at 70,000 to 85,000 yuan, about half of the S01, but sales have reached 46,000 units (by the end of 2021), about 17 times that of the S01.

Auto analyst Zhang Xiang believes that the reason why T03 is selling well is that it accurately positions the A0 car segment. "Due to the relatively small number of models, the A0 car at that time was a blue ocean, and the zero-run T03 was very exquisite, and the functions should be there, and the T03 used a high cost performance to pry open the market." Zhang Xiang said.

The best-selling T03 brings a good growth rate data for zero-running cars. Zero-Run Cars mentioned in the prospectus that, according to Frost & Sullivan, Zero-Run Cars is the fastest growing company among China's leading emerging electric vehicle companies in terms of delivery volume. At the same time, zero-run cars have also gained the attention of the capital.

Zhu Jiangming, the founder of Zero-Run Automobile, said in an interview with the media that in the second half of 2020, the number of investors who came to the company increased significantly. On the one hand, the sales growth brought by T03, while the third car C11 also let the capital see hope, and "Wei Xiaoli" has been listed, attracting funds, "zero running is likely to be their (capital)'s last ticket."

Although T03 sold well, its success could not be replicated and continued. Zhang Xiang told Zhongxin Jingwei that the advantage of T03 is high cost performance, and if it goes down along the positioning of T03, zero-run cars face no small resistance in terms of cost. Moreover, the current A0 automobile market is already a red sea, and car companies such as Chery, Euler, and Wuling Hongguang are fighting in this market.

The C11 is the third model launched by ZeroCar, priced at 160,000 to 200,000 yuan, and is a medium-sized pure electric SUV. By the end of 2021, 22,536 orders had been harvested. C11 this car, the main focus is also cost-effective. C11 model is very large, whether it is model design, or hardware facilities, have a certain degree of competitiveness, and the so-called price is only half of tesla Model Y, in small and medium-sized cities, C11 is a very face-saving car.

As for the new model C01 that has not yet been delivered, although the detailed price is not known, according to the previous zero-run car conference, zero-run C01 and zero-run C11 are in the price range of 150,000 to 200,000. The biggest highlight of the new model C01 is the use of a new technology, that is, the battery chassis integration technology (CTC) that can make the vehicle have a range of 700 kilometers. It is understood that the C01 will be the first model in the world to use the CTC chassis. In addition, the extender version, four-wheel drive electric, is also the highlight of the C01.

As of now, the zero-run car has a minimum of 70,000 models on sale and a maximum of 240,000, and has products in different market segments. In the eyes of industry insiders, in terms of the current limited resources of zero-running cars, this product matrix is the most reasonable route. "The product distribution of zero-run cars is very efficient now. When customers are attracted to the store by marketing, there are different models in front of each price point, and there is always one that can meet the budget. In the current situation of zero run, a comprehensive long snake formation play is a correct product strategy. Zhang Xiang said.

Zhang Xiang believes that in terms of mainly attacking cities, zero running has targeted small and medium-sized cities. "Compared with Tesla and 'Wei Xiaoli', zero-run cars started late. If you insist on draining traffic in first-tier cities for marketing, you will have to pay a huge cost behind it. Therefore, zero-run cars hope to dislocate marketing with the first echelon and expand the market in small and medium-sized cities. Zhang Xiang said,

After inquiring about the official website of Zero Run Car, Zhongxin Jingwei found that there are 4 experience centers in Beijing, which are located in Changping District, Fangshan District and Fengtai District. In small and medium-sized cities, such as Ningbo, Zero-Run Cars has opened 9 experience centers, and many are located in high-end shopping malls such as Yintai and Wanda.

By the end of 2021, there will be 23 direct-operated stores and 268 dealer cooperative stores. At the same time, Zero-Run Is also expected to open its first overseas flagship store in Europe in 2023.

In 2021, a total of 43,748 cars were delivered, with revenue of 3.132 billion yuan and sales costs of 4.520 billion yuan. If other impacts are not taken into account, for every car sold, Zero Run will lose nearly 32,000 yuan. Under the influence of various factors, the gross profit margin of zero-running cars from 2019 to 2021 continued to be negative, -95.7%, -50.6% and -44.3% respectively. On the other hand, "Wei Xiaoli" has achieved positive growth in gross profit margins, of which the gross profit margin of Ideal Auto has exceeded 20%.

Although the gross profit margin continues to be negative, Zhu Jiangming is very optimistic about the future, and has set the goal of "benchmarking Tesla" and "selling 800,000 vehicles in 2025" for zero-run cars.

To achieve the target of 800,000 units, ZeroCar is expected to launch eight new models by the end of 2025. From the perspective of market competition, the burden on zero-running cars is not small.

It is reported that in addition to the C01 of zero-run cars, there are also a number of car companies that will debut or deliver one or more brand new models in 2022. For example, WEILAI expects to release ET7, ET5, ES7, including lidar, 1000km endurance, electric suction door and other highlights, while Lantu's dreamer, with a length of 5.3 meters and a wheelbase of 3.2 meters, has created a precedent for large-scale MPV. These models are potential competitors of the Zero-Run C01.

According to the listing application materials of Zero Run Automobile, Fu Liquan and Zhu Jiangming are acting in concert and jointly hold 31.01% of the shares of Zero Run Car. According to public information, Zero Run Auto was founded in 2015, the initial controlling shareholder was Dahua Shares, after several rounds of financing, the shareholding ratio of Dahua Shares was diluted to 8.89%; the current controlling shareholder is Fu Liquan, holding 15.7%; Zhu Jiangming, the founder of Zero Run Automobile, holds 11.7% of the shares. At the same time, Fu Liquan and Zhu Jiangming hold 34.18% and 5.36% of the total share capital of Dahua shares, which are second only to Hikvision's security giants.

Zhu Jiangming, who came out of the security giant, is very ambitious, talking about the creation of zero-run cars, Zhu Jiangming once said: "I still have a dream of 100 billion, but the global total of security products is only 100 billion, so we must choose a new industry." ”

This ambition can be seen from the zero-run car manufacturing method, unlike other new car-making forces, zero-running cars start from scratch; core technical components are self-developed and produced; the underlying interface, algorithm and data communication protocol are unified; and the supply chain is simplified and production costs are reduced.

According to Frost & Sullivan, Zero-Run Cars is currently the only emerging electric vehicle company in China with global independent research and development capabilities, and it is also the emerging electric vehicle company with the highest degree of vertical integration in China. It is understood that before August 2021, zero-run cars will still be oem by another automobile company. Since then, zero-run cars have been produced in a self-built plant in Jinhua, with a current production capacity of 200,000 units per year. At the same time, ZeroCar also said that it owns a 66,700-square-meter piece of land in Jinhua, which can be used to further expand production, and plans to build a new factory in Hangzhou with an area of about 540,000 square meters in 2022. (Zhongxin Jingwei APP)

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Editor-in-Charge: Chang Tao